Even if our balance sheet stays large for a while, we have two broad means of tightening monetary policy at the appropriate time: paying interest on reserve balances and taking various actions that reduce the stock of reserves.
The Dow Jones Industrials, anticipating a Federal Reserve interest-rate hike on Feb. 2, plunged 289 points, or nearly 3%.
Moreover, they should compete to borrow any funds that are offered in private markets at rates below the interest rate on reserve balances because, by so doing, they can earn a spread without risk.
The US Treasury pays the Federal Reserve interest on the US Treasury bonds that the central bank has bought on the open market as part of its quantitative easing, but the Fed always sends that money right back again.
But if this trend in private bank money creation continues, it does augur for higher rates of monetary inflation, especially, as Chairman Bernanke suggested at Jackson Hole in August, if aided and embedded by a reduction in the rate of interest the Federal Reserve pays banks on those excess reserves.
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Will another conundrum keep US interest rates low even if the Federal Reserve raises short-term interest rates?
The Federal Reserve slashed interest rates this week, and that made Wall Street happy.
Last week, the US Federal Reserve cut interest rates for the sixth time this year.
What they are assigning a high probability to is the Federal Reserve keeping interest rates unchanged.
If inflation remains subdued, why would the Federal Reserve allow interest rates to rise so high?
The Federal Reserve left interest rates unchanged at 1.25% at its policy meeting on January 28th and 29th.
If the Federal Reserve hikes interest rates, Harley may hit a speed bump because financing spreads will narrow.
China had already begun to implement tightening measures when it raised interest rates and increased reserve requirements last month.
And you must watch out for signs of danger like the possibility of the Federal Reserve raising interest rates even a fraction.
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This week America's Federal Reserve raised interest rates by a quarter of a percentage point for the 16th meeting running, to 5%.
The company's stock rose 5.6% after the Federal Reserve cut interest rates.
Like other countries, China can raise interest rates and bank reserve requirements.
America's Federal Reserve cut interest rates by another quarter-point, to 3.75%.
With the Federal Reserve keeping interest rates extremely low, high-dividend-paying stocks have been commanding a premium from investors seeking to boost income generated by their portfolios.
The last time the Federal Reserve slashed interest rates to shore up the economy, between 2001 and 2003, it sowed the seeds of today's housing mess.
The central bank last year cut interest rates and raised reserve requirements for foreign and local banks in an unorthodox attempt to deter rising capital inflows.
The international press focuses on increases in interest rates and bank reserve ratios, but Chinese officials are relying on more direct measures to keep prices in check.
Last week, the Federal Reserve cut interest rates for the seventh time since September but indicated it could be the last reduction for a while.
But with the Federal Reserve keeping interest rates low, taxable interest fell 17%, a big hit to retirees who rely on interest from bank CDs or taxable bonds.
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Meanwhile, a series of hikes by the Federal Reserve raised interest rates from 1 percent to 5.25 percent, pushing many adjustable rate mortgages beyond the means of borrowers, Dodd said.
Just before the U.S. Federal Reserve raised interest rates by half a point May 16, Biggs and Senior Correspondent Assif Shameen ran through the outlook for various Asian markets, having already taken the hike into account.
There are a couple of recommendations that I would make, given our view of the world in which you are going to be seeing the Federal Reserve raising interest rates, possibly later this year or certainly into next year.
We've pointed out that the Federal Reserve lowered interest rates three quarters of a percentage point in effort to flood the economy with money and stave off a recession, or - if we're already in one - a worse recession.
Meanwhile, with the bailout assured, investors are expecting a bit of turbo power behind it with an interest-rate cut from the Federal Reserve, which currently is targeting a 2.0% annual interest rate on overnight money.
Further, in response to the recession, the Federal Reserve has slashed interest rates to near 0%.
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