Sentences with phrase «run fed funds rate»

Raising the Fed's inflation target could mitigate those problems by lifting the longer - run fed funds rate.

Not exact matches

All of this raises questions about support for a critical line in the Fed's statement where it says: «The federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run.»

For instance, in January 2012 the Fed's long - run view of the «median terminal funds rate» was 4.25 %.

Now, an institution that has the unlimited ability to create new money can never run short of money and will therefore never need to borrow money to fund its operations, but the Fed sometimes borrows money via RRPs as part of its efforts to manipulate interest rates.

The Fed's projected path of interest rates shifted downward, with the long - run federal funds rate now seen at 3.5 percent, compared with 3.75 percent at the last policy meeting.

Moreover, by keeping short - run interest rates near zero for more than seven years, paying interest on excess reserves (IOER) above the effective fed funds rate, and convincing markets that rates would stay low for a long time (forward guidance), the Fed has increased the reach for yield and appears more interested in priming Wall Street than in letting markets set interest rates and allocate credfed funds rate, and convincing markets that rates would stay low for a long time (forward guidance), the Fed has increased the reach for yield and appears more interested in priming Wall Street than in letting markets set interest rates and allocate credFed has increased the reach for yield and appears more interested in priming Wall Street than in letting markets set interest rates and allocate credit.

Now, a 3 % Fed funds rate will produce other problems (inflation, lower dollar), and it won't really solve the overall mortgage credit problems in the short - run, but it is what the market expects by mid-2008.

Look at the reduction in the expected end of year Fed Funds rate — down 0.35 % in 2015 (to 0.77 %), 0.51 % in 2016, 0.32 % in 2017, and 0.12 % in the long run.

My questions: how low do we go with the Fed funds rate, and how much will price inflation run in the process?

Given that the effects of QE2 are subsiding, the FOMC moves the Fed funds sentence up higher in the document and moves up the language that «low rates of resource utilization and a subdued outlook for inflation over the medium run — are likely to warrant exceptionally low levels for the federal funds rate for an extended period.»