Search results
Results from the WOW.Com Content Network
Yet the bond market is pricing in deep cuts in the funds rate over the next 12 months—and 10-year treasury bonds are trading at a very large 150 basis point discount to the current funds rate ...
The Fed’s dot plot is a chart updated quarterly that records each Fed official’s projection for the central bank’s key short-term interest rate, the federal funds rate. The dots reflect what ...
As of Aug. 9, the FOMC’s target federal funds rate range is 5.25% to 5.50%. The effective federal funds rate at which banks make overnight loans is 5.33%.
Federal funds rate vs unemployment rate. In the United States, the federal funds rate is the interest rate at which depository institutions (banks and credit unions) lend reserve balances to other depository institutions overnight on an uncollateralized basis. Reserve balances are amounts held at the Federal Reserve.
At the same time, the Fed operates a discount window in which it lends funds to banks at the discount rate (a third administered rate), which puts a ceiling on the federal funds rate, as banks are unlikely to borrow elsewhere at a higher interest rate than the discount rate. Open-market operations are no longer used to steer the FR, but still ...
The discount rate was cut by 50 bp—to 5.75% from 6.25%—and the term of loans was extended from overnight to up to thirty days. That reduced the spread of the primary credit rate over the federal funds rate from 100 basis points to 50 basis points.
He estimates that the neutral rate at 2.8%, well below the current fed funds rates. That's based on the 10-year bond yield, which historically trades 100 basis points above the neutral rate.
It also provided for the creation of a fund to swap safe Treasury securities for less secure ones held by banks. It lastly shaved the difference between the discount rate and the federal funds rate from 50 basis points to 25. Official statement: January 30, 2008 3.00% 3.50% 9–1 Fisher dissented, preferring no change. Official statement