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CarlitosMMT

(53 posts)

19. Fed funds rate

Reply to MarcA (Reply #18)

Tue Sep 17, 2019, 04:06 PM

Sep 2019

The Fed sets the overnight interest in the banking system. It does so by defending the rate ie buying/selling as is needed.
It does not explicitly set other rates but does implicitly target rates of longer duration.
There is no crisis here.
They just haven’t had to do this since the financial crisis because they loaded the system with excess reserves. The problem then was rates going lower than their set target rate.
This used to be a normal thing. Reserves vibrated in the banking system - bouncing around in the system minute by minute b/n banks.

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A $53 billion crack just emerged in the financial markets... [View all] pbmus Sep 2019 OP

Oh shit . . . Iliyah Sep 2019 #1

We are in some deep shit... pbmus Sep 2019 #2

Destroying integrity in our government, in our markets, in our treaties, in our institutions. Midnight Writer Sep 2019 #3

Bingo.. pbmus Sep 2019 #4

Hmmmmm...and largely ignored by most people...$53 billion is a lot of money... SWBTATTReg Sep 2019 #5

Or the money press will crank up even more. KPN Sep 2019 #23

2008... czarjak Sep 2019 #6

This is exactly how it began in 2008: DetlefK Sep 2019 #7

There were plenty of warning signs in 2008 mtngirl47 Sep 2019 #14

Greenscum destroyed our financial stability UpInArms Sep 2019 #15

I dunno about that. There were lots of warnings ... KPN Sep 2019 #24

Yes, it began in spring 2008, but it still seemed to come out of nowhere. DetlefK Sep 2019 #31

That's probably because for those of us listening, KPN Sep 2019 #33

Seems so LONG ago. I actually do not recall. Thanks riversedge Sep 2019 #26

GET-OUT-OF-THE-MARKET Joe Nation Sep 2019 #8

uhh oh rurallib Sep 2019 #9

Ut Oh ! Pepsidog Sep 2019 #10

OP - Please consider an important cross-post in the DU Economy forum category n/t Backseat Driver Sep 2019 #11

This is complete bullshit leftstreet Sep 2019 #12

They who? I am really wondering? Shrike47 Sep 2019 #21

Nah, they're trying to keep the markets climbing.This is all about KPN Sep 2019 #25

The overnight rate is all about liquidity, not overall financial position Amishman Sep 2019 #32

Yep. All of the signs are there. Amimnoch Sep 2019 #13

The last rescue of this kind since 2008? That's strange. The financial markets were in freefall ffr Sep 2019 #16

oh come on. this is very temporary, very technical problem, readily fixed. unblock Sep 2019 #17

Who Determines the Overnight Borrowing Rates? MarcA Sep 2019 #18

Fed funds rate CarlitosMMT Sep 2019 #19

Thank you for explaining this. n/t MarcA Sep 2019 #20

Is this a technical fix ? uponit7771 Sep 2019 #22

Fed announces plans to carry out repo operation for second straight day riversedge Sep 2019 #27

123 billion,oh boy,this is scary. Wellstone ruled Sep 2019 #30

I'm already financially messed up. Lady Freedom Returns Sep 2019 #28

Thank you empedocles Sep 2019 #29

I listened to Delphinus Sep 2019 #34