Questions tagged [fed-funds-rate]

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Are major banks in US necessarily going to benefit from the rise of federal fund rates?

https://wtvbam.com/2022/01/05/fed-funds-futures-see-rate-hike-in-march-after-minutes-of-policy-meeting/ It is believed that Fed is very likely to raise the Federal Fund rates in the next a couple of ...
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Forward Guidance affects interest rate?

Forward guidance affects the effective federal funds rate, right? as opposed to the overnight reverse repurchase/overnight loans, longer-term interest rates, or discount rate of loans from the Fed to ...
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Does FED's change in short-interest rates impact long term rates?

Through changing the federal fund rate(short-term), does this empirically impact the longer end of the curve? If so, what is the logic or transmission mechanism that caused the change?
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How TLT is priced?

When FED rate rise bond prices go down because people are willing to buy new bonds with higher income. But does it work the same straight way for a bond ETF, ex. TLT? If someone sells one treasury ...
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Credit risk of interest rate on excess reserves vs fed funds rate?

I noticed that the interest rate on excess reserves and the fed funds rate are almost exactly the same at all times. Why is this the case? Shouldn't the credit risk of a bank be higher than the ...
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Why is the prime rate typically 3% higher than the fed funds rate?

What is the right framework to think about the prime rate in relation to the fed funds rate? Idea 1: A bank is safer to lend to than even trustworthy institutions so there's a premium on prime rates. ...