Summary
The latest GDP report also showed that corporate profits, before taxes, fell 0.6% in the first quarter. The decline in home sales based on contract signings last month was much steeper than expected. The benchmark 10-year US Treasury yield slid below 4.6%.
Pending home sales slumped 7.7% in April to a reading of 72.3, according to data from the National Association of Realtors. The Fed doesn’t directly set mortgage rates, but its actions, which influence yields, do. The Dow closed 331 points lower, or 0.9%.
I say up it all the way so I can get some easier returns on my savings. The rate doesn't really set interest rates. It effectively sets the maximum interest rates at one layer of lending in the market, what banks lend each other, via what the fed lends them. You could set it at 125% and consumer interest rates would go where they actually should.
It would temporally be a bit painful because this would reshape which processes in the market calculate as profitable and the restructuring would lead to some job losses before hirings. But you can get around that with interpolation. It would basically slowly remove price setting.