Latest / The Federal Reserve Podcast with Fexingo: Interest Rates, FOMC Meetings, and Monetary Policy
The Fed's New Tool for Controlling Money Market Rates
On this episode of The Federal Reserve Podcast, Lucas and Luna explore a quiet but significant shift in how the Fed manages short-term interest rates. With the effective federal funds rate sitting at 3.63 percent and the interest rate on reserve balances at 3.65 percent, the Fed has been relying on a new tool: the overnight reverse repurchase agreement facility. Lucas explains why this facility has become the Fed's preferred way to keep the federal funds rate within its target range, and why it matters for money market funds and banks. They also look at the latest data, including a flat…
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