The fed funds rate directly or indirectly influences many other interest rates in our economy — if you borrow or lend.
Not exact matches
Since the
Fed no longer can raise the
Fed Funds rate by withdrawing reserves (there being some $ 2.7 trillion in excess reserves thanks to QE), ON RRP will be the new mechanism to peg the overnight policy
rate directly.
Though
Fed funds rates do not
directly control mortgage
rates, they are influenced by some of the same factors.
When the
Fed increases the federal
funds rate, it does not
directly affect the stock market itself.
Remember, though, that the
Fed funds rate is a very short - term interest
rate that does not
directly impact long - term
rates like mortgage
rates.
The second equation is the actual real interest
rate in the economy, tied
directly to the
Fed Funds rate, which is convenient.
The third equation is the household consumption function, tied
directly to the real interest
rate that is tied
directly to the
Fed Funds rate.
In the past, however, there have been rare instances where the federal
funds rate has exceeded the discount
rate, and it's been cheaper for banks to borrow money
directly from the
Fed than from each other.
Congress ended 2015 with an 11 % approval
rating; that's not
directly tied to the presidential campaign
fund (since that money is, obviously, for presidential campaigns and not for Congress) but it does underscore the fact that people are
fed up with politicians and feel like they don't deserve that money.
In recent statements, the
Fed has indicated that another
rate hike is anticipated for 2017 to bring the
Fed Funds rate — the interest
rate that the
Fed directly manages — to 1.40 % by year end.