Serving the Quantitative Finance Community
-
- mapleleafs
- Posts: 0
- Joined:
Why effective fed funds rate lower than target
why effective fed funds rate lower than target since Sept? how does it happen?does paying interest on excess reserve help?tks
-
- Martinghoul
- Posts: 188
- Joined:
Why effective fed funds rate lower than target
Too much cash being pumped by the Fed O/N. Yes, paying interest on reserves helps.
Why effective fed funds rate lower than target
See this for a good explanation...The new, improved fed funds market
-
- RatesTrader
- Posts: 0
- Joined:
Why effective fed funds rate lower than target
This is the "quantitative easing" peoeple have been talking about.Despite Fed Fund target rate is at 1%, due to the massive supply of USD in the market, the day to day rates are traded lower at 0.27% yest (weighted average) with a ragne of 0.125% and 1.25%>> see FEDFUNDS1 is the RIC but as the rates are lower than the target, there could be action from the fed again...like increasing required reserves?