Questions tagged [federal-reserve]

The tag has no usage guidance.

Filter by
Sorted by
Tagged with
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 ...
user avatar
  • 5,523
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 ...
user avatar
18 votes
3 answers
875 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?
user avatar
  • 472
12 votes
3 answers
321 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 ...
user avatar
  • 2,173
10 votes
2 answers
9k 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, ...
user avatar
8 votes
1 answer
339 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?
user avatar
6 votes
4 answers
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 ...
user avatar
  • 747
6 votes
3 answers
694 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 ...
user avatar
  • 3,397
6 votes
2 answers
6k 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:/...
user avatar
  • 585
5 votes
3 answers
549 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. ...
user avatar
  • 153
5 votes
2 answers
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 ...
user avatar
5 votes
1 answer
357 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 ...
user avatar
  • 159
4 votes
4 answers
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 ...
user avatar
  • 151
4 votes
1 answer
130 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 ...
user avatar
  • 51.6k
4 votes
2 answers
324 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 ...
user avatar
  • 3,397
4 votes
2 answers
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 ...
user avatar
  • 619
3 votes
3 answers
408 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 ...
user avatar
  • 1,502
3 votes
2 answers
541 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 ...
user avatar
3 votes
1 answer
123 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 ...
user avatar
  • 496
3 votes
2 answers
603 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 ...
user avatar
  • 332
3 votes
2 answers
170 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 ...
user avatar
  • 632
3 votes
1 answer
108 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 ...
user avatar
  • 331
3 votes
0 answers
70 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 ...
user avatar
  • 543
2 votes
1 answer
596 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?
user avatar
2 votes
2 answers
72 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 ...
user avatar
2 votes
1 answer
182 views

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 ...
user avatar
  • 21
2 votes
1 answer
450 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 ...
user avatar
  • 292
2 votes
1 answer
116 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 ...
user avatar
2 votes
2 answers
250 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 ...
user avatar
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 ...
user avatar
  • 212
1 vote
2 answers
318 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 ...
user avatar
  • 735
1 vote
1 answer
112 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 ...
user avatar
  • 543
1 vote
2 answers
275 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 ...
user avatar
1 vote
2 answers
82 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 ...
user avatar
1 vote
2 answers
513 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 ...
user avatar
  • 113
1 vote
1 answer
475 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 ...
user avatar
1 vote
2 answers
242 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 ...
user avatar
  • 133
1 vote
2 answers
322 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 ...
user avatar
1 vote
1 answer
90 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 ...
user avatar
1 vote
1 answer
146 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.
user avatar
1 vote
1 answer
91 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 ...
user avatar
  • 203
1 vote
0 answers
81 views

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, ...
user avatar
1 vote
0 answers
50 views

Can the Federal Reserve permanently decrease money supply? [closed]

As far as I understand it, the primary way the Federal Reserve decreases the money supply is to sell bonds. The entities buying these bonds give up their cash for them and thus M0 is decreased. ...
user avatar
  • 213
1 vote
1 answer
88 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 ...
user avatar
  • 2,778
1 vote
1 answer
2k 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 of gold in 2011 (Marcus Grubb, managing director World Gold Council). On the same article it states ...
user avatar
0 votes
2 answers
197 views

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 ...
user avatar
  • 1,189
0 votes
1 answer
112 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 ...
user avatar
  • 1
0 votes
1 answer
129 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.
user avatar
0 votes
3 answers
289 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 ...
user avatar
  • 253
0 votes
1 answer
63 views

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 ...
user avatar
  • 4,048