I am ready to meet my maker, but whether my maker is prepared for the great ordeal of meeting me is another matter.
Winston Churchill
King of the Birds, Lord of the Skies
Gather ye rose buds while ye may, old time is still a flying;
and this same rose that you see today, tomorrow will be dying.
CarpeDiem: Seize the Day!
- Dead Poets Society
Tuesday, August 21, 2007
Federal Funds Rate
Federal funds rate: What is it?
It is the interest rate that institutions pay when they borrow reserves overnight from each other. Banks borrow reserves in the federal funds market in order to meet reserve requirements set by the Federal Reserve, and to ensure adequate balances in their accounts at the Fed to cover checks and electronic payments that the Fed processes on their behalf.
Please note that changes in the federal funds rate often have a strong impact on other short-term rates. That's why everybody is watching this fed fund rate like nobody's business, which is currently standing at 5.25%. And guess who or what gets to decide this number should be altered from time to time? Or well at least 8 times a year?
Right. The Federal Open Market Committee (FOMC). She is the Federal Reserve's top monetary policy-making body! So don't pray pray huh!!! More next entry. Watch for it...
It is the interest rate that institutions pay when they borrow reserves overnight from each other. Banks borrow reserves in the federal funds market in order to meet reserve requirements set by the Federal Reserve, and to ensure adequate balances in their accounts at the Fed to cover checks and electronic payments that the Fed processes on their behalf.
Please note that changes in the federal funds rate often have a strong impact on other short-term rates. That's why everybody is watching this fed fund rate like nobody's business, which is currently standing at 5.25%. And guess who or what gets to decide this number should be altered from time to time? Or well at least 8 times a year?
Right. The Federal Open Market Committee (FOMC). She is the Federal Reserve's top monetary policy-making body! So don't pray pray huh!!! More next entry. Watch for it...
Limited Definition of Others
We must not allow other people's limited perceptions to define us.
Virginia Satir
Virginia Satir
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