This preview shows page 1. Sign up to view the full content.
Unformatted text preview: Target Feds Funds Rate: Not a market interest rate-not even an interest rate, a number-Fed occasionally changes number at open market committee meetings Borrowing/Lending Fed Funds-Fed buy reserves from one bank and places them in another bank-Reallocating reserves, no additional money in system Discount Loans:-generate more reserves-more money in the system-used prominently during financial crisis How does the Fed keep the Fed Funds Rate at the target level?...
View Full Document
- Fall '10