Even before the Federal Reserve lifted interest rates by a half point on May 16, investors and market makers already were pondering the Fed's next action. In recent weeks, a more aggressive policy move had become viewed as a done deal. Still, the important question remains: Where does ...
Interest on reserve balances previously used different rates. One is the Interest on Required Reserves (IORR), while the other is the Interest on Excess Reserves (IOER). However, the Board decided to consolidate it to one interest rate, effective last July 29, 2021. The IORB applies to mast...
That shouldn’t be a surprise. With the number of changes coursing through the economy and incoming policy yet to be implemented, they don’t know what will happen.
Why doesn't the US government create as much money as it wants to spend and control inflation through contractionary policies such as raising interest rates and reserve requirements? Why does investment rise and interest fall when the fed reduces the tax rate on savings? Why does Feder...
Why do stock markets fall so much in response to a surprise hike in the monetary policy rate? Does the stock market provide high-frequency evidence that monetary policy stimulates the real economy? Or, conversely, does monetary policy drive the stock market by calming or exciting investors’ ner...
The same fundamentals that have revived gold’s current bull market—lower real rates, central bank buying, safe-haven appeal—could remain in place in the months and years ahead. Past performance does not guarantee future results. All opinions expressed and data provided are subject to change ...
Why does monetary policy take some time to affect the economy? How long does it take for monetary policy to take effect? Why doesn't the US government create as much money as it wants to spend and control inflation through contractionary policies suc...
Inflation's at a 40-year high, and the Fed is relentlessly raising interest rates to hit the brakes on the economy, slow the economy to try to snuff out inflation. And remember that upside down relationship - interest rates go up, bond values go down. But what does that really mean ...
“Don’t worry. We’re not going to raise rates in the light of higher inflation.” But the time they do get round to raising rates, which is more than a year later, the inflationary genie is already out of the bottle. I think the institutional setup was suc...
Raising the rate: Conversely, when the Fed wants to cool down an overheating economy or combat inflation, it raises the target rate, making borrowing more expensive and encouraging saving. Holding steady: In periods of economic stability, the Fed may choose to keep the rate unchanged for extende...