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| ====FED==== | | ====FED==== |
| 4 - "Federal funds rate" Advance our understanding of the Federal Funds Rate. Create a short summary at the top of the article which simplifies the topic as much as possible. | | 4 - [[Federal funds rate]] Advance our understanding of the Federal Funds Rate. Create a short summary at the top of the article which simplifies the topic as much as possible. |
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| The Federal Funds Rate is given in a range currently in a range between 4.25-4.5. Major Facilities:
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| ON RRP = Overnight Reverse Repurchase Agreement (currently 4.3%) which serves as the floor to lower interest rates as eligible institutions can park their money there [https://www.newyorkfed.org/markets/rrp_faq]
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| EFFR = Effective Federal Funds Rate (currently 4.33%) which are weighted overnight borrowings between Banks [https://fred.stlouisfed.org/series/EFFR].
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| IORB = Interest Rate on Reserve Balances (currently 4.4%) [https://fred.stlouisfed.org/series/IORB]
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| While the spread between the ON RRP and EFFR makes sense i don't understand the spread to IORB. Are there limits how much institutions can provide to it?
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| More potentially helpful materials (did not read all of it) [https://www.federalreserve.gov/monetarypolicy/iorb-faqs.htm]
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| [https://libertystreeteconomics.newyorkfed.org/2022/01/how-the-fed-adjusts-the-fed-funds-rate-within-its-target-range/]
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| [https://www.newyorkfed.org/markets/domestic-market-operations/monetary-policy-implementation/repo-reverse-repo-agreements]
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