0
What is the difference between federal funds rate and the discount rate?
Wiki User
∙ 9y ago
The Federal Funds rate abbriviated as Fed Funds is the overnight loan rate between banks. The Discount Window is the Federal Reseve Bank of New York's overnight interst rate charged to banks from the Federal Reserve, called the discount window rate.
Wiki User
∙ 9y ago
Add your answer:
Earn +20 pts
In The Recent Past The Federal Reserve Has Set The Discount Rate?
above the federal funds rate
What is the difference between the federal funds rate and the discount rate?
Financial and banking jargon is particularly arcane and confusing because different people use different terms for the same ideas, concepts, and rates. Other terms sound the same but are different. The federal funds rate, for example, is sometimes called the federal funds target rate or the intended federal funds rate. The latter two terms are more descriptive, because both imply that the Federal Reserve does not have direct control over the rate. The actual federal funds rate is the weighted average of interest rates that banks charge each other. It's set by open market competition but comes remarkably close to the target set by the Fed. The discount rate, in contrast, is usually about a half to a full percentage point higher than the federal funds rate. The Federal Reserve does control that one. The discount rate is the interest rate the Federal Reserve charges other depository institutions for very short-term (usually overnight) loans.
What tool of monetary policy will the Federal Reserve use to increase the federal funds rate from 1 percent to 1.25 percent?
the discount rate
What is the federal funds overnight rate?
The federal funds rate is the rate which banks charge one another for overnight loans used to provide needed capital to meet reserve requirements. The federal funds rate is the rate which the federal reserve may adjust thru open market operations such as the buying and selling of US treasuries. As of March 2010, the federal funds rate hovers between 0 and .25%.
How do you change federal funds rate?
The federal funds rate is the interest rate banks charge on loans in the federal funds market. The federal funds rate is not set administratively by the Fed. Instead, the rate is determined by the supply of reserves relative to the demand for them.
In the recent past the Federal Reserve has set the discount rate .?
above the federal funds rate
In The Recent Past The Federal Reserve Has Set The Discount Rate?
above the federal funds rate
What is the difference between FICA and federal?
In short, FICA is for Social Security insurance contributions and only funds that. Federal is for income tax, which funds many things, but NOT your SS benefit.
What is the difference between the federal funds rate and the discount rate?
Financial and banking jargon is particularly arcane and confusing because different people use different terms for the same ideas, concepts, and rates. Other terms sound the same but are different. The federal funds rate, for example, is sometimes called the federal funds target rate or the intended federal funds rate. The latter two terms are more descriptive, because both imply that the Federal Reserve does not have direct control over the rate. The actual federal funds rate is the weighted average of interest rates that banks charge each other. It's set by open market competition but comes remarkably close to the target set by the Fed. The discount rate, in contrast, is usually about a half to a full percentage point higher than the federal funds rate. The Federal Reserve does control that one. The discount rate is the interest rate the Federal Reserve charges other depository institutions for very short-term (usually overnight) loans.
What is the key difference between the federal budget and individual state budgets?
Federal a national budget with funds to support the military, and federal programs. The state budget is only for that state.
What tool of monetary policy will the Federal Reserve use to increase the federal funds rate from 1 percent to 1.25 percent?
the discount rate
What are the means by which the Federal Reserve System effects the Discount Rate?
The FOMC sets targets for the Discount Rate. By trading securities, the Federal Reserve Bank of New York, it affects the Federal Funds Rate which is the interest rate by which banks lend to each other overnight.
What is the difference between fundraising drive and a fundraising campaign?
I believe a drive is part of a campaign. A school can be campaigning to get funds for a new library by having discount card and bake sale drives.
What do Federal reserved do?
Everything. They control the flow of money in the economy of the United States. They also control in the discount rate on federal funds. That rate indirectly affects the federal funds rate, which is the rate at which the banks can get money themselves. So that rate indirectly affects the interest rate that banks have on loans.
When the Fed raised the interest rates between 2004 and 2007 the Federal Reserve?
Correct answer B. sold U.S. government securities, thereby contracting funds to the federal funds market
What are the key differences between owners funds and borrowed fund?
The difference between owner's funds and borrowed funds is just that. One is owned, and the other must be paid back.
What is the federal funds overnight rate?
The federal funds rate is the rate which banks charge one another for overnight loans used to provide needed capital to meet reserve requirements. The federal funds rate is the rate which the federal reserve may adjust thru open market operations such as the buying and selling of US treasuries. As of March 2010, the federal funds rate hovers between 0 and .25%.
