Flow of Money - Fed Funds Market скачать в хорошем качестве

Flow of Money - Fed Funds Market

SUMMARY: What is the Federal Funds Market? How does The Federal Reserve set interest rates? CHALLENGE QUESTIONS: 1) If the Fed Funds Rate has been pushed to zero, and The Fed is supporting the rate by paying interest on reserves, what is the difference between a 1-Year Treasury at 0.25%, and a 1-Year Reserve Deposit at 0.25%? 2) If Treasury only printed money and drove the Fed Funds rate to a permanent zero, would inflation be driven by interest rates, or fiscal policy? CORRECTIONS & AMPLIFICATIONS: 1) In the examples in the video, I set the rate on 1-year Treasuries to the same as the Federal Funds Rate to prove a point that they are closely related. However, both The Fed Funds Rate and Treasuries rate fluctuate in a [narrow] range day-to-day. The Fed Funds Rate might fluctuate between 0.15-0.30%, while the Treasuries rate might fluctuate between 0.25-0.40%. 2) I explain how Treasuries Securities are really only a tool to support the base interest rate. Without Treasury paying interest on Dollar savings, the rate would drop to zero. Another way this is accomplished is by The Fed paying an interest rate on Dollar Savings. Yet, we never hear of any solvency constraint with debt-dollars issued by The Fed - meanwhile, we run in fear when Treasury issues _debt-dollars_. Hint: This is related to Challenge question 1. ;)