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1answer
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Is The Federal Reserve's Balance Sheet Captured in any of the Money Supply Figures? [on hold]

Is the $4T balance sheet captured in any of the money supply estimates or is it separate? Thank you in advance for your consideration and response.
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0answers
58 views

How does the Federal Reserve decide to increase Treasury rates? [closed]

Lending Lending is pretty clear to me as it is explained in many online articles. To my understanding, the US Federal Reserve will increase the interest rates for it to lend money to major banks when ...
2
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2answers
69 views

Can you use fed interest rates to predict the share price of a bond ETF?

The Fed interest rate is inversely proportional to a bond's value: When the Fed increases interest rates, your bonds lose value. When the Fed decreases interest rates, your bonds gain value. Since ...
2
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2answers
94 views

Question about the Federal Funds Rate

As I understand it, the Fed will set a target for what it wants the Federal Funds Rate to be and then try to achieve this goal through its open market operations. Is the amount of volume that the Fed ...
3
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1answer
89 views

What are exactly these “interest rates” you hear about in relation to the Fed?

I know what interest is and what an interest rate on a loan, deposit, or bond is. What I do not quite understand, and what gets under my skin, is this generic "interest rate" you read alongside the ...
3
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2answers
146 views

Why are bank rates based on the federal interest rate?

From what I have read, the Federal Reserve sets the "key rate", which is the rate at which banks can borrow money from the Reserve. However, I don't understand why both mortgage lending rates and ...
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2answers
178 views

What will happen to the stock market, once governments increase interest and stop quantitative easing? [closed]

A lot of stock indexes seem to be steeply increasing in price in the last couple of years. For example S&P500 but also lesser known indexes like ATX. Is this the more or less direct result of ...
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2answers
71 views

Effect on Bond asset allocation if Equity markets crash?

Let's say "Tom" allocated a large amount of capital in some fund's (it's TIAA-CREF, actually) bond assets. In our fictional scenario 2 things are going to happen in the next year: The equity markets ...
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7answers
10k views

Why would a bank need to accept deposits from private clients if it can just borrow from the Federal Reserve?

As far as I understand, all banks can borrow money from the Central Bank (Federal Reserve in the US) and the rates are (currently) extremely low (or even negative in some cases). If that is so, why ...
0
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1answer
58 views

What is the main purpose of FED increase and decrease interest rate? [closed]

What is the main goal of adjust the interest rate lower or higher, what is the impact on the Country's economy?, and how effects average citizen.
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2answers
292 views

Deposit Reclassification

My last statement from a given bank contained the following notice: Deposit Reclassification: Under federal law, the Bank is required to classify our deposits a certain way for regulatory banking ...
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3answers
198 views

Why does the Fed use PCE over CPI? [closed]

The Fed has used PCE being at 1.6% as an excuse not to raise rates over the past few FOMC meetings even though (core) CPI is running at 2.3%. After (cursorily) reviewing the difference between the ...
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2answers
218 views

How are bonds affected by the Federal Funds Rate?

My question is how do bonds react to changes in the Federal Funds Rate? Specifically, government bonds, because I don't see corporate bonds being affected as drastically. I've done research, but for ...
1
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1answer
67 views

Federal Reserve Notes vs Coins [closed]

More of a two part question. In the current system (Fiat only currency), why is a Federal Reserve Note booked as a liability (on the Fed balance sheet), but a Coin is not booked as a liability by the ...
3
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3answers
343 views

Should I change 401k investment options to prepare for rising interest rates?

As the "Fed" (in the USA) is getting ready to raise the federal funds rate, is it a good idea (or is it even possible) to try to adjust my 401k portfolio for better returns? I'm speaking in general ...
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3answers
225 views

What exactly is the interest rate that the Fed is going to adjust?

Lately, the financial press talks non-stop about the Fed doing this and that to the interest rate. What exactly is this interest rate that the financial press is talking about? Why is this Fed ...
3
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1answer
94 views

Investments minimally affected by Federal Reserve rate increases?

What short term investment instruments would be a good option when the Federal Reserve funds rates are anticipated to rise? My understanding is bonds will decrease in value since the newer bonds with ...
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3answers
687 views

How can banks pay interest on money they borrow from the FED? [closed]

I'm not sure if this is the right site to ask this question. If it's not, please point me in the right direction. So, if the FED is the only institution that can increase the monetary base (create ...
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0answers
156 views

Recover abandoned US bank account

I have had problems to find out where, at which American bank, a company I worked for had deposited commission cash and given custody of some shares I purchased through options. But now that I found ...
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1answer
203 views

Regulation T and Initial Margin Requirements: How to interpret the 50%?

I wanted to understand initial margin requirements in the Federal Reserve's Regulation T section of the code. I read an article in Investopedia on Regulation T requirements, but I still feel uneasy ...
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1answer
78 views

How does Fed's imminent cut-off in its monthly buyback program detrimentally affect Emerging Markets currencies?

I've been reading a lot of news regarding how Fed's plan in cutting its MBS buyback program has negatively affected Emerging Markets currencies, e.g., Philippines and Indonesia. However, I am not ...
3
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2answers
546 views

Effect of Quantitative Easing on Price of Bonds

I don't seem to understand the effects of QE. Fed uses open market to purchase long-term government bonds which pushes up the demand for bonds and drives up the price of bonds. However, this ...
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2answers
6k views

Why is a coin an asset whereas a note is a liability on the Federal Reserve's balance sheet? [closed]

Can someone explain me why coins are assets and notes are liabilities for the U.S. Federal Reserve? I know coins are made from "precious" metals, but even notes are made from various materials too, ...
2
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1answer
425 views

Does the Federal Reserve have the power to buy municipal bonds through quantitative easing?

Does the Federal Reserve (or any other central bank in any other country) have the power to buy municipal bonds through quantitative easing? If it does, where would I find out how much?
2
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1answer
96 views

How do banks fail if they do not have capital problem but only have liquidity problem when Fed exists?

Banks have Fed as lender of last resort - so if Fed provides loans to banks, banks with liquidity problems seems to be OK. But in reality, banks fail when met only with liquidity problems. So is this ...
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2answers
1k views

Why do interest rates increase or decrease?

Do interest rates increase based on what the market is doing, or do they solely increase based on what the Federal Reserve sets them at? Why is it assumed that interest rates are going to increase ...
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2answers
589 views

Why does quantitative easing negatively affect stocks?

Is there a solid rationale for why the Fed's quantitative easing negatively affects the stock markets? Is it because markets were due for a correction, and quantitative easing provided the excuse? ...
5
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1answer
241 views

What are good investments to use as hedges when the Federal Reserve draws down quantitative easing?

Basically I think it is quite obvious that quantitative easing (QE) will be pulled back eventually and countries will start to tighten their monetary policy. When that happens, what kind of assets ...
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1answer
120 views

Does the Fed keeping interest rates low stimulate investment in the stock market and other investments?

I heard that if the Fed keeps interest rates low then folks with money to invest will choose something other than just a money market or passive sort of investment, perhaps choosing investing in the ...
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2answers
195 views

Where do stock traders get realtime updates on Fed announcements? Is there a feed I could scrape? [closed]

Upcoming Fed announcements are important, and I want to get the news in realtime when it happens. I know there are a few expensive services, but I'm looking for some feeds that can be scraped or ...
8
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1answer
274 views

Investments: Feds buying more treasury bonds? How does it affect Bonds (going up or down)?

I have set up a 401(k) and I have bonds. When the Federal Reserve buys more treasuries (today's news) what's the effect on bonds? Should I sell my bonds or buy more?
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1answer
1k views

Why do Central Banks buy gold for their gold reserves?

I read The People's central Bank of China (i think called PBOC) should have bought 50 to 70 tons fo gold in 2011 (Marcus Grubb, managing director World Gold Council). On the same article it states ...
6
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4answers
2k views

Why can't the Fed lower interest rates below zero?

Ben Bernake said today that he can't lower interest rates further because they can't be lowered below zero. IIUC benchmark interest rates are determined by what someone is willing to pay in an ...
5
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3answers
295 views

How are mortgage interest rates determined?

I know it's somewhat controlled by what the Fed sets interest rates at. I'm not clear on what exactly this interest rate is. Also I have heard that mortgage interest rates track Treasury Bonds. ...
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2answers
1k views

Why is seigniorage different for paper notes and coins?

Wikipedia defines Seigniorage for paper notes and metal coins. Why is seigniorage for paper money not just face value - production cost? I can understand using just the interest rate in the age of the ...
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4answers
6k views

How much control over the Federal Reserve does the U.S. Government have? [closed]

Or, in other words: Who does the head of Fed report to? Is the Federal Reserve a private institution? I'm going to be a bit naive here, have just read about how the Fed has been brought to life and ...
3
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2answers
517 views

What does the Fed do with the extra money it is printing? [closed]

Last month I read some news about the Fed printing money to devalue the U.S. Dollar compared to other currencies. But what do they do with this extra money?
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2answers
5k views

Why does the Fed buy treasury bonds through Goldman Sachs instead of from the treasury?

These animated creatures don't like it, and think the federal reserve is just giving Goldman Sachs money: http://www.youtube.com/watch?v=PTUY16CkS-k Quora says it is an auction through dealers: http:/...
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3answers
691 views

Is there any way to know how much new money the US is printing?

There is a lot of talk about the Fed printing money. Is there any way to know how much new money is being printed and when?