The world has risk-laden problems to solve. Higher borrowing rates are indicia of higher risks to returns on capital, but the cries for lower rates do not appear to resonate with capital’s search for high returns that compensate for higher risks. If the Federal Reserve System is to meet its statutory dual mandate of stable … Continue reading Is it time for the Federal Reserve to raise the federal funds rate?
We are moving deeper into the silly season. If there are still any primaries going on, Super Tuesday just about sucked what little oxygen there was out of the room. That President Joe Biden and former president Donald Trump would end up being the presumptive nominees for their parties was, based on the polling, expected. … Continue reading If the Fed wants to protect its political independence, it should petition to amend the Federal Reserve Act.
I live in the 30310-zip code made up primarily of Atlanta’s West End neighborhood. There is a population of approximately 26,062 people with a median income of $24,604. 79.9% of the residents classify themselves as African American or black, while 12.4% of residents classify themselves as white or Caucasian. The unemployment rate hovers around 4.6%. … Continue reading Fed Day: The Community Reinvestment Act misses growth creation in low-income communities.
The U.S. Bureau of Economic Analysis gave the Federal Open Market Committee another reason to sing, “Should I Stay or Should I Go?” this morning as the Bureau presented its read on changes in consumer price levels. The Personal Consumption Price Index, the preferred price level barometer of the Federal Reserve System, increased 2.8% between … Continue reading It appears that the foreign exchange and bond markets were ready for the PCE report.
In comments made last week by a number of members of the Federal Open Market Committee, traders and investors should hold their horses on a cut in overnight banking rates anytime before June 2024. There appears to be some sentiment among Committee members that reducing the overnight lending rate between banks (federal funds rate) and … Continue reading I see baby Boomers seeking yield. Will the U.S. central banking system accommodate them?
At times I think that traders and bank depositors operate in sandboxes oblivious to the rest of the playground that surrounds their play area. The media offers enough noise to distract market participants from the philosophy that orders the interaction between the State, the banking system, and transactional markets. I consider banks to be the retailer of … Continue reading The Court’s role in supporting monetary policy.
The Federal Open Market Committee is set to meet on December 12-13, 2023 to determine the target range for the federal funds rate. The federal funds rate is the interest rate at which depository institutions lend balances held either at the Federal Reserve or in their bank vaults to other depository institutions overnight. The current … Continue reading The federal funds rate: In the end, is it not about supporting the banking system?
The issue for me is whether the Federal Reserve is acting as a regulator of the interbank market or are banks regulating themselves, using the fed funds rate and IORB as caps and borrowing from the discount window when there is no other choice. Continue reading Is the Federal Reserve really not needed?
The takeaway …. The Federal Open Market Committee is expected to announce no change in the target range for the federal funds overnight rate. The current target range is 5.25-5.50%. The federal funds rate is the rate banks charge for lending their reserves to each other overnight. The current effective (weighted) rate is approximately 5.33%. … Continue reading Foreign exchange, fed funds futures, and bond yields as of 9:35 am EST
Alton Drew 