When the Federal Reserve started cutting
its benchmark Fed Funds Rate, savings account rates began suffering.
The economy may be healthy enough for them to raise interest rates, but the new 0.5 percent to 0.75 percent target for
the benchmark fed funds rate, up a quarter point from where it had been, remains far below the historical norm — and, by all indications, the Fed still expects rates to stay low for at least a few more years.
Not exact matches
Though the
Fed has been in a slow
rate - hiking pace since December 2015 — the December 2017 increase was the fifth in the current cycle — its
benchmark funds rate remains targeted at just 1.25 percent to 1.5 percent.
Historically, the
Fed has responded to recession by cutting
rates substantially, with the
benchmark funds rate falling by 400 basis points or more in the context of downturns over the past two generations.
The
Fed has a dual mandate to maximize employment and stabilize inflation, which it tries to achieve primarily by pushing up or down the federal
funds rate, the
benchmark short - term financing cost for banks that influences a wide range of borrowing
rates for households and businesses.
On March 31st the Federal Reserve raised its
benchmark interest
rate for the sixth time in 3 years and signaled its intention to raise
rates twice more in 2018, aiming for a
fed funds target of 3.5 % by 2020.
The US Federal Reserve didn't find a compelling reason to raise interest
rates at its March policy meeting, maintaining its
benchmark short - term interest
rate (
fed funds rate) in the range of 1/4 to 1/2 percent.
One of the
Fed's most - used tools that it relies on to influence the economy is the federal
funds rate — also known as the
benchmark interest
rate.
According to CME Group's
Fed Watch tool, traders are pricing in a roughly 80 percent chance that the
Fed announces a 0.25 percent hike to the
benchmark federal
funds rate on Wednesday afternoon.
Benchmark interest
rates, such as the LIBOR and the
Fed funds rate, affect the demand for money by raising or lowering the cost to borrow — in essence, money's price.
The
Fed's go - to move is tweaking its target for the federal
funds rate, which is what banks charge one another for loans and the
benchmark for our
rates on mortgages, credit cards and other debts, as well as savings accounts, CDs and Treasury bonds.
Benchmark interest
rates, such as the LIBOR and the
Fed funds rate, affect the demand for money by raising or lowering the cost to borrow — in essence, money's price.
Interactive Brokers calculates an internal
funding rate based on a combination of internationally recognized
benchmarks on overnight deposits (ex:
Fed funds, LIBOR) and real time market
rates as traded, measured, in the interbank short - term currency swap markets, the world's largest and most liquid market.
The
Fed's discount window has three different facilities and associated
rates; the
benchmark primary credit
rate currently stands at 6.25 %, 1.00 % above the Federal
Funds target
rate; the secondary and seasonal credit
rates exceed the primary
rate.
The
Fed raised
rates for the third time this year, bringing the
benchmark Fed Fund Target
Rate to 1.25 % -1.50 %, as expected.
With inflation ticking higher and the employment situation improving, the Federal Reserve anticipates gradually lifting the
benchmark federal
funds rate in 2017 and 2018.1 Officials are also discussing plans to shrink the
Fed's huge bond portfolio ($ 4.5 trillion).
One of the
Fed's most - used tools that it relies on to influence the economy is the federal
funds rate — also known as the
benchmark interest
rate.
APRs to go up as
Fed raises interest
rates — Interest
rate setters at the Federal Reserve raised their
benchmark federal
funds rate for just the second time in 10 years... (See
Fed)
The
Fed lowered the federal
funds rate — a key interest
rate benchmark that affects most consumer loans — down to zero in 2008 and has yet to raise it.