Sentences with phrase «equilibrium federal funds rate»

In a floor system, banks are kept flush with excess reserves, and monetary control is exercised, not be adjusting the quantity of reserves so as to achieve a particular equilibrium federal funds rate, but by manipulating the interest rate the Fed pays on banks» required and excess reserves holdings, alone or along with the Fed's overnight reverse - repo (ON - RRP) rate.

Not exact matches

But the prescription offered by the Taylor rule changes significantly if one instead assumes, as I do, that appreciable slack still remains in the labor market, and that the economy's equilibrium real federal funds rate — that is, the real rate consistent with the economy achieving maximum employment and price stability over the medium term — is currently quite low by historical standards.

Officials also expect interest rates to tread higher with at least two increases in 2019 and 2020 correspondingly, bringing the federal funds rate to 3.375 percent effectively, higher than the 3 - percent equilibrium rate, as indicated by the dots.