Federal funds rate is a rate at which a bank can lend the excess of minimum deposit and other obligatory payment requirements, to other needy banks that are facing a shortfall. This process is done overnight.
To estimate the amount of reserves that a bank must maintain to meet the customer needs, the last two weeks averaged reserve requirements are used as a benchmark, and excess can be lent to a bank that has a shortfall of cash.
The federal fund rate is set by the federal open market committee that gives a rate for guidance purposes. However, the real rate paid by borrowing bank is negotiated between two banks.
Suppose an econometric model based on past data predicts a small decrease
As part of its response to the global financial crisis, the
Go to the St. Louis Federal Reserve FRED database, and
The Fed has announced a new, lower target for the federal
The Fed can change the discount rate directly and the federal funds
Critics of the Federal Reserve in 2013 warned that the Federal Reserve’s
Would it be a good idea for monetary policy makers to set
Suppose an econometric model based on past data predicts a small decrease
If the federal funds rate is 6 percent and the discount rate
Would it be a good idea for monetary policy makers to set
