{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

ECO3011019 - Offsetting changes – Dynamic OMO-a rduction...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
ECO301 10/19/11 Offsetting changes: Defensive OMO - Change in reserve demand: loan growth - OMO to change the actual back to the target o Defensive OMO If demand for reserves changes more or less than Fed predicts, the actual fed funds rate can differ from the target, feds can try to correct this mistake the next day
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Offsetting changes – Dynamic OMO-a rduction in the target Fed Funds rate-Fed must bring the actual down to the new target-Must bring down interest but must make sure that increase in reserve demand doesn’t push rate back up...
View Full Document

{[ snackBarMessage ]}

Ask a homework question - tutors are online