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What most likely effect of the Fed lowering the discount rate on overnight loans?

An increase in the money supply


What does fed funds purchased mean?

Fed funds purchased refers to the borrowing of excess reserves by a bank or financial institution from another bank in the federal funds market. This transaction typically occurs overnight and allows the borrowing bank to meet reserve requirements or manage liquidity. The interest rate charged on these transactions is known as the federal funds rate, which is a key tool for monetary policy set by the Federal Reserve.


What is a tool commonly used by the federal reserve whereby it buys or sells u.s. treasury bonds?

A tool commonly used by the Federal Reserve is open market operations, which involve the buying and selling of U.S. Treasury bonds. When the Fed buys bonds, it injects liquidity into the banking system, lowering interest rates and stimulating economic activity. Conversely, selling bonds withdraws liquidity, which can raise interest rates and help control inflation. This tool is vital for implementing monetary policy and influencing the overall economy.


Is the Fed loaning out zero interest money to the banks and then having the banks loan it out at a much higher rate as shell game to bail them out without getting more govt. money and raising taxes?

Ah, the million dollar question. Well, one of them. It certainly seems that the Fed is not above shady (if not downright illegal) business dealings and able to get away with them every time. As to what the Fed is ACTUALLY doing, I don't think anyone will be able to tell you. Its an organization with zero transparency and it seems like all we can do as citizens and tax payers, is guess.


Why are saving accounts not subject to the fed reserve requirements?

savings accounts are not subject to the Fed's reserve requirements because savings accounts are not as liquid as checking accounts.