fed funds rate

Certainly if the Fed was concerned it would be preparing markets for a hike in the Fed Funds rate.

That's not just what I say, by the way: the FT reports that the Fed's own economists estimate the desired Fed funds rate at -5 percent.

A comparison of Libor with the Fed funds rate shows that the gap between these two rates is at its lowest level since February 2008.

Pulling that lever isn't an option for the Fed, which cut its fed funds rate to its current level just above zero in December 2008.

If Mr Bernanke's 1997 study is right, timely reductions in the fed funds rate should avert such a recession.

With the fed funds rate now targeted at 1%, and on most days trading below that, the target rate is already near the zero-bound.

The Fed's open market committee voted unanimously for a reduction in its key fed funds rate to 1%, the lowest since June 2004.

So to keep the fed funds rate up, it has, since November 6th, been paying interest on excess reserves at the full target rate of 1%.

During the depths of the territory's last economic downturn in 2003, the Fed funds rate was conveniently just one per cent.

Two-year Treasuries are yielding a full percentage point less than the Fed funds rate.

Two years after American house prices started to slide, the Fed funds rate has fallen from 5. 25% to 2% (see right -hand chart).

But it did manage to work the Fed funds rate down to 1% and final sales surged.

The Fed funds rate is the rate at which banks lend their balances to each other overnight.

There's little left to cut on their fed-funds-rate target, at near zero since last December.

This matters now as the Federal Reserve intends to keep the Fed funds rate very low well into 2010.

Ultimately, low Fed funds rate will anchor the longer term bond yield.

With Tuesday's unprec- edented decision to move the Fed funds rate in effect to zero, US monetary policy has entered a brave new world.

Figure 4. 7 shows how the Fed Funds rate lags Merrill Lynch's MOVE Index, which is a measure of fixed-income volatility, by three years.

The Fed's torrent of cash pushed the fed funds rate down to 1% this week, from a high of 6% in the wake of Lehman's failure.

A 50 basis points cut in the Fed funds rate to 4. 75 per cent was a tonic for America's crisis-struck economy.

It underestimated the risk of maintaining the Fed Funds rate at 1 per cent in 2003 and 2004, contributing to the orgy of excessive debt.

The interest rate is the discount rate, currently 0. 25% above the Fed funds rate.

Will the central bank cut the Fed funds rate?

The discount rate is currently 0. 75 per cent over the Fed funds rate.

But, more recently, the actual Fed funds rate has fallen much below the target rate, which is 1 per cent.

That is why the Federal Reserve is maintaining a zero Fed funds rate.

The Fed funds rate soared above its 2 per cent target and at one stage was quoted at between 6 per cent and 8 per cent.

If we apply the Rudebusch version of the Taylor rule to the mean Fed forecasts, I get the following for what the Fed funds rate should be: