Questions tagged [federal-reserve]

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How do reserve balances held by the banks at the fed show up on their balance sheet? [migrated]

I assumed banks' reserve balances at the FED would increase with higher interest rates (less lending, more money held in reserves). However, looking at the balance sheets of major banks, the ratio of ...
A. Shultz's user avatar
0 votes
1 answer
161 views

Why did the Fed increase the fixed rate of I-bond to 1.3% from 0.4% for the US?

What could be the cause of this increase? Would the trend continue? Why or why not?
HelloDarkWorld's user avatar
2 votes
2 answers
144 views

Market Reactions to Federal Reserve's Rate Decisions

Background: During the meeting on December 13, 2023, the Federal Reserve (Fed) decided to keep interest rates at the level of 5.25% - 5.50%. The market's expectation is that interest rates have peaked ...
Tomek Tarczynski's user avatar
-4 votes
1 answer
111 views

Why don't Federal Reserve Notes pay for purchases? [closed]

What constitutes true payment if a Federal Reserve Note is NOT payment? Ounces of gold? Anything I deem value in agreement with another party?
user121884's user avatar
1 vote
2 answers
94 views

Which mortgage rates and how soon get affected by Fed's hikes/drops?

I know that Fed doesn't set mortgage rates directly, but they usually follow Fed's policy. My question is: How soon do mortgage rates go up after Fed's rate hikes, and do Fed rate hikes affect all ...
InfiniteLoop's user avatar
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1 answer
77 views

What is the relationship between Feds Fund Rate vs. Certificate of Deposit Rate in the US?

I've noticed the Fed in the US has increased their Fed Fund Rate and the banks in the US have also increased their rates in the Certificate of Deposits (CD) from 0.XX% to 4.XX% since 2021 until now. ...
HelloDarkWorld's user avatar
8 votes
2 answers
2k views

Why did the composite rate for I bonds issued drop to 6.89% from 9.62% when the Fed has been increasing interest rate?

Why did the composite rate for I bonds issued drop to 6.89% from 9.62% when the Fed has been increasing interest rate? What is the correlation between I bonds rate and Feds fund rate?
HelloDarkWorld's user avatar
1 vote
1 answer
67 views

Lag between Fed Announcement and Actual Implementation

After the Fed announces its new target range for Fed Funds, is there a set number of days before actual implementation? If not, is there a convention, like within a week? I'm wondering, because the ...
kfmfe04's user avatar
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3 answers
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In theory, can FDIC fail?

In theory, can FDIC fail? If it goings default, who is going to cover the customers? Will the federal reserve automatically prints money to keep FDIC alive? Or such decision must be made through a ...
dodo's user avatar
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1 answer
190 views

Why is a Federal Reserve Note an Obligation of the United States?

The Federal Reserve Act says that a Federal Reserve Note is an Advance from the Board of Governors of the Federal Reserve to a Federal Reserve Bank and serves NO OTHER PURPOSE. When Federal Reserve ...
user avatar
2 votes
0 answers
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Why do we have *daily* series of T-bill yields?

I understand that each week the US Treasury issues new T-bills at different maturities (1-month, 3-months, 1-year, etc). As far as I understand, this issuance happens every Tuesday. After the auction, ...
Raul Guarini Riva's user avatar
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How can treasury bond ETF increase its value when the FED raises interest rates?

The theory about bonds say that when the interest rates raise, bonds value falls since today's bonds have a higher yield than yesterday's bonds. However, let's take the 2018-2019 period. The FED ...
Martel's user avatar
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Deposit stimulus check electronically without signatures?

We went through the process of moving, and now I can't find the stimulus check. I did take pictures of the check before moving, but the check doesn't have our signatures. Since my bank lets me deposit ...
Joe's user avatar
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2 votes
2 answers
103 views

Bond yield vs Fed interest rate correlation

Could someone explain to me why large investors (eg Bill Gross) are shorting bonds now? Why are people/media believing that bond price crashing down is related to the Fed potentially increasing ...
Kaguya Ōtsutsuki's user avatar
1 vote
1 answer
91 views

What are the implications of a steepening yield curve? [closed]

Pretty straightforward question, with, I imagine, very complex answers. I know the yield curve basically impacts the entire financial system, but I am looking to understand its macro-effects. Here are ...
Runeaway3's user avatar
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2 votes
1 answer
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Why do some dates not have any data on the Federal Reserve historical currency data?

Example: https://www.federalreserve.gov/releases/h10/hist/dat00_al.htm Some of the days, such as 12-Nov-01, say ND instead of a price. I assume that this means "No Data", but it's not ...
Shamond's user avatar
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1 answer
123 views

How much USD is there in total? [closed]

If I hypothetically took all of the USD out there in physical currency and in people's savings/checking account then how much would I have? I suppose this would also include any liquid cash that ...
anon's user avatar
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1 answer
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Will stimulus create an opportunity to raise interest rates? [closed]

I don't know very much about economics myself, but I have noticed two concerns repeated often lately. One is that the recent injection (?) of trillions of dollars of stimulus money into the economy ...
Ken - Enough about Monica's user avatar
4 votes
1 answer
141 views

What are the practical effects for banking consumers from Fed cutting fractional reserve requirements to zero?

With all the other news, it seems like the fed eliminating the Fractional reserve requirements for banks in is not getting so much attention. Everyone is talking about the Fed Discount rate, which I ...
JohnFx's user avatar
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what is the actual OBFR loan rate fee?

The OBFR for March 13 2020 was 1.10%. When a company takes a 1 million over night loan, so they pay 1.1% fee of $11,000, or is it annual like credit card and mortgage where the 1.1% gets divided by ...
KingsInnerSoul's user avatar
1 vote
1 answer
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Will the Feds pumping 500 billions affect Treasury Bond ETFs?

I was wondering about the question above. I was told that the feds pump the market by buying stocks and bonds which theoretically means that they're going to be investing in bond ETFs. Is my theory ...
Whiteclaws's user avatar
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1 answer
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What kind of payments are accepted for the initial purchase of United States Treasury securities?

What kind of payments are accepted for the initial purchase of United States Treasury securities ? (not be to confused with trading done on the secondary market) When a normal person is purchasing ...
user1086516's user avatar
1 vote
1 answer
571 views

Does federal tax refund check mail contain SSN or any personal information?

I lived in a residential apartment and someone took my federal tax-refund check mail and opened it. It's my first time to file federal tax return and I had no ideal what was in side that mail. Does ...
ShoutOutAndCalculate's user avatar
1 vote
2 answers
366 views

What is the difference between Overnight Repo Operations and Term Operations When talking About the Repurchase (Repo) Market?

According to the NY Fed website: In accordance with the most recent Federal Open Market Committee (FOMC) directive, the Open Market Trading Desk (the Desk) at the Federal Reserve Bank of New ...
KingsInnerSoul's user avatar
3 votes
0 answers
73 views

Are Fed repo operations done through the discount window?

Recently the Fed performed repo operations to keep the effective Fed funds rate down and close to its target. Is this the usual way banks get loans from the discount window, using treasuries as ...
Jonah's user avatar
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1 answer
117 views

How has the Fed been reducing its balance sheet?

I understand the Fed has been letting its treasury securities mature without reinvesting in new ones, but does the Treasury actually pay the Fed the principal? That is, does the Treasury's reserve ...
Jonah's user avatar
  • 543
2 votes
0 answers
101 views

The Fed Lowered Interest Rates, Are they going to buy Bonds?

The Fed just lowered interest rates yesterday by 0.25%. I haven't heard anyone mentioning a resurgence of quantitative easing (QE). Are they buying bonds in order to influence the interest rate? If ...
jyapx's user avatar
  • 212
34 votes
7 answers
12k views

Can I lend a small amount of my own money to a bank at the federal funds rate?

I have a dollar that I won't be needing tonight, and I hear that banks are in the market for short-term loans. In fact, the present Fed funds rate is higher than the interest rate on any savings ...
Display Name's user avatar
6 votes
3 answers
742 views

Why does the Fed change rates in quarter points rounding?

I have always seen( since 1990s) that the Fed changes( cut/increase) interest rates in quarter point increment /decrements in USA that affect the world bond, stock market and borrowing rates, while I ...
Raj's user avatar
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4 votes
2 answers
325 views

what is the possibility of USA having negative interest rate [closed]

There has been attempt at reducing the interest rates. Apart from, elderly and savers depend on the bank interest and Stock market is driven by interest rates, the true cost of money if becomes ...
Raj's user avatar
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0 votes
1 answer
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What is the effect of a Fed Reserve rate cut on corporate bond funds?

What is the likely effect of a Fed rate cut on corporate bond funds like VTC? I would think if the Fed rate goes down it would make the corporate bonds more valuable as their dividends become ...
blacksmith37's user avatar
0 votes
1 answer
382 views

Fed's interest rate vs. effective rate?

I'm trying to understand the "Fed interest rate". Wikipedia says: "Financial institutions are obligated by law to maintain certain levels of reserves... The bank can borrow the requisite funds ...
Danijel's user avatar
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1 vote
1 answer
150 views

Is The Federal Reserve's Balance Sheet Captured in any of the Money Supply Figures? [closed]

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.
Ramón J Romero y Vigil's user avatar
3 votes
2 answers
199 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 ...
JoJo's user avatar
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2 votes
2 answers
255 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 ...
user5246445's user avatar
3 votes
1 answer
143 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 ...
ToniAz's user avatar
  • 506
4 votes
2 answers
616 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 ...
GendoIkari's user avatar
1 vote
2 answers
285 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 ...
user1721135's user avatar
1 vote
2 answers
90 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 ...
thanks_in_advance's user avatar
46 votes
7 answers
12k 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 ...
JonathanReez's user avatar
  • 5,842
0 votes
1 answer
131 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.
Daniel Fuentes's user avatar
1 vote
2 answers
547 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 ...
Mooseman's user avatar
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0 votes
3 answers
301 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 ...
cph2117's user avatar
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1 vote
2 answers
345 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 ...
DukeLuke's user avatar
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1 vote
1 answer
97 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 ...
user3911038's user avatar
3 votes
3 answers
430 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 ...
Ogre Psalm33's user avatar
  • 1,517
11 votes
3 answers
365 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 ...
curious's user avatar
  • 2,177
3 votes
1 answer
111 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 ...
AaronLS's user avatar
  • 341
2 votes
1 answer
495 views

How can I recover an 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 ...
CMPSoares's user avatar
  • 292
0 votes
1 answer
292 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 ...
Andrew's user avatar
  • 301