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What would happen to real short term interest rates if the Fed kept short term market interest rates at zero and deflation occurred and was expected to continue?
Macroeconomics Question: What would happen to real short term interest rates if the Fed kept short term market interest rates at zero and deflation occurred and was expected to continue?
Why are short term CD rates higher than long term?
Short-term CD rates are higher than long-term rates because banks and financial institutions typically offer higher interest rates for shorter-term deposits to attract customers and have more flexibility in adjusting rates based on market conditions.
What is the best definition of the term structure?
In finance, the term structure refers to the relationship between the maturity of a debt instrument, such as a bond, and its yield or interest rate. It describes how the yield curve slopes, indicating the interest rates at different maturities. The term structure is an essential indicator for investors and policymakers to assess market expectations about future interest rates and economic conditions.
Why are long-term CD rates lower compared to short-term CD rates?
Long-term CD rates are lower compared to short-term CD rates because there is more uncertainty and risk associated with locking in a fixed interest rate for a longer period of time. Lenders offer higher rates for short-term CDs to attract customers and compete in the market, while long-term CDs offer lower rates to compensate for the potential changes in the economy and interest rates over time.
What is Definition of capital market?
Compare money market the financial institutions collectively that deal with medium-term and longtime capital and loans ruchita
What factors contribute to the volatility of interest rates, particularly in the context of short- and long-term rates?
Interest rates can be volatile due to various factors such as economic conditions, inflation rates, central bank policies, and market expectations. Short-term rates are more sensitive to immediate changes in these factors, while long-term rates are influenced by expectations of future economic conditions and inflation.
What are the current refinanced mortgage rates available on the market?
The current refinanced mortgage rates available on the market vary depending on factors such as the lender, the borrower's credit score, and the loan term. It is recommended to shop around and compare rates from different lenders to find the best deal.
What can the Federal Reserve Bank of New York do to control short term interest rates?
To control short term interest rates, the Federal Reserve Bank of New York should establish a floor on money market rates while improving monetary policy.
Why does long term bond fluctuate more when interest rates change than do the short term?
longer term bond fluctuates more because in the longer term market conditions changes dramatically....in the long term their face value may eiter increase or decrease due to increase in interest rates.
What is the problem definition of capital market?
Definition of capital market line
What is the definition of fixed interest rates?
An interest rate that remains constant throughout the agreed term. If changes in the goverment base rate occur where commercial rates rise or fall you wont be affected.
Where can one find the bank money market rates?
One can find the bank money market rates by going to Citizens Bank website. The website quotes rates on many financial rates, including bank money market rates.
