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PST - The Fed Does Not Set Rates... It Follows The Market
ProShares UltraShort Lehman 7-10 Year Treasury
The Fed sets the Fed Funds rate to match T-Bill rates with a small premium. The premium has fallen since Paul Volcker who typically set Fed Funds 1% above T-Bill rates. His only preemptive actions were to quash inflation thinking by consumers with 2 sharp rate increases to force US into back-to-back recessions in the early 1980s. Since then, each Fed Chair set their own premium level with Bernanke settling on 0.2% premium. Powell appears to be using 0.1%.
Using the history of Fed adjustments to Fed Funds rates, current T-Bill rates at 1.5% vs.