About the discount rate… don’t read a…

About the discount rate… don’t read a whole lot into that (the market isn’t). The Discount rate is the rate charged to banks as the Lender of Last Resort. When a bank has to go to the discount window to stay solvent, they are already in trouble. The amount of money outstanding is relatively small and the main thing they are doing is changing it to only lend the money overnight – basically forcing banks to go find a non-government source of funds for their liquidity. The Fed Funds rate is the one to watch. When it goes up, that could set off the chain reaction.