Questions tagged [federal-reserve]
Use only for questions that are directly related to the central bank of the United States, the "Fed". For example, US monetary policy, US money supply, US balance sheet, etc. Do not use for generic questions related to central banks, monetary policy or other, which are not directly related to the Fed. Use instead central-banking, monetary-policy, or related tags.
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Is the Federal Reserve issuing money in a fair way?
Basic logic says that, once a central bank is issuing new money for increasing the money supply, the money should be distributed fairly between all the citizens, and that means giving them all an ...
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How much physical currency does the Fed transfer to banks per year?
I just wonder since money has to enter the system somehow. Currently the Fed will supply whatever banks ask to meet their capital needs. But how much physical currency does the Fed, treasury, and mint ...
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How does the Fed get money [duplicate]
As far as I'm aware, the Federal Reserve has 4.5$ Billion on its balance sheet.
Where did it get the money for buying all those assets?
I understand that it makes money out of interest on the bonds ...
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Why did the rate of money supply growth accelerate from 1993-96 in the United States?
Even though the rate of growth in the monetary base decelerated — and the money multiplier decreased for the most part — from 1993-96 in the United States, the growth rate of the M2 money stock still ...
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Basic Reason of Why the Money Supply Needs to Increase? [duplicate]
Hello, all. So I am trying to gain a thorough understanding of why the Fed, or any other Central Bank, needs to keep pumping money into the economy as it grows. My question is not asking why ...
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Why did the rate of money supply growth increase from 1993-96 in the United States?
Even though the rate of growth in the monetary base decelerated — and the money multiplier decreased for the most part — from 1993-96 in the United States, the growth rate of the M2 money stock still ...
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Fed, Asset prices, and the Economy
Often you hear people speak about how the Fed has created a fake economy, or one that is propped up with their support, and that they have artificially raised asset prices. What does this exactly mean?...
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How and when did the public learn of monetary policy changes before FOMC announcements and press conferences?
I've been reading about the Federal Open Market Committee's announcements of monetary policy decisions, specifically the time at which the announcements are made and then how the markets somewhat ...
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Federal Reserve Securities Coming Due
Let's say the Federal Reserve purchases a \$100 one-year Treasury bill from the market, and puts ~\$100 of cash into the economy. A year later, this T-bill comes due, and the Treasury pays the Fed $...
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Can someone explain to me why no new bill exist to regulate financial derivatives yet? [closed]
Isn't it bad economically for soft regulation on financial instruments like derivatives.
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Wouldn't reducing Fed Balance Sheet lead to Inverted Yield Curve?
BACKGROUND
I am involved in finance, but by no means an economist. I've been reading Ben Bernanke's "The Courage to Act" and have become interested in QE1 and QE2. Currently, I am trying to ...
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The Federal Reserve is only issuing cash money?
When the Federal Reserve is issuing money, they are only printing cash money (coins and banknotes)?
If not, then what other types of money they are issuing?
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Why would increased inflation increase the value of the dollar and bond yields?
I was reading this Fortune article (http://fortune.com/2016/11/14/donald-trump-victory-dollar-inflation/) and came across this confusing quote:
"'Clearly the market has settled on a 'buy dollar' ...
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What physically happens when foreign currency reserves change?
Assume that the United States decided to hold more yuan in the federal reserve. Which processes does that involve? I assume there is some sort of electronic exchange between the two central banks ...
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How does the Federal Reserve remove money from circulation?
I was watching a video about what gives money its value, and they say it's the total number of bills in circulation.
The Federal Reserve can print or remove money from circulation. But if somebody ...
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Federal Reserve Interest
Banks have higher interest rate for debts than deposits to make money but does the U.S. treasury have the same interest rate for loans and deposits?
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Why does the Federal Reserve seem to hold so much weight on the unemployment rate, relative to labor participation?
The title is the question.
In the press conference held yesterday, the Chair referenced "unemployment" 18 times, relative to "participation" 3 times. If the labor participation is at the lowest ...
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What is a bilateral currency swap line? [closed]
Please explain in simple terms. How exactly does it function?
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What is the effect of Quantitative Easing on the US budget deficit?
Is the deficit getting larger because of QE?
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Is there any scientific proof that 2%-3% target inflation rate is ideal?
There are a couple of central banks (RBA, Federal reserve for example) that use inflation rate as a key indicator to regulate their official cash rates.
Those target inflation rates usually range ...
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Can a government or central bank work to reduce inflation without hiking interest rates and causing the currency to appreciate?
Since trying to lower inflation will have some undesirable consequences, such as currency appreciation, which hurts exports, should governments and central banks keep hands off on inflation?
But ...
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Why not just print money to combat deflation?
If interest rates are zero and inflation is under 2% per year then why not have the fed print money without borrowing until inflation is back at 2% per year? The money could be used to pay off the ...
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Do you have a list of books about the evolution of the banking sector?
I'm looking for interesting books to read about the banking sector.
Topics:
Changes in the banking sector,
Adaptation of financial services in the digital age,
European and US banking regulations
...
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Dollar Before the Federal Reserve
A lot of bloggers like to write that the dollar has lost 90+% of its value against a basket of goods since the Fed was created. Without a comparison to the former dollar, that's a meaningless ...
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Who owns the federal reserve?
Does anyone know who actually owns the federal reserve? It's like a public private institution, who are the private owners, and who are the public owners?
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Does the Federal Reserve buy and sell stocks?
Can the Fed buy and sell stock in publicly traded companies? Is there evidence of this and, wouldn't this behavior drive the price as opposed to actual market forces?
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The Fed may increase the rates. But will that make the government debt unsustainable?
The US Fed is increasing its interest rate targets. These rates will eventually affect most other interest rates in the US economy. In particular, interest rates on US government bonds will also ...
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Macroeconomic effects of Profit Maximizing Federal Reserve
The Fed makes money through its open market operations. I am considering a scenario in which the Fed, instead of trying to achieve goals like controlling inflation, tries to maximize its profits in ...
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What is the logic the Fed used for paying interest on reserves?
During the last few years, the Fed has been paying banks interest on reserves. Its a strange policy if you want banks to invest their money in the real economy. Why did they do this? Is it a way to ...
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Federal Reserve Open Market Operations
I am trying to understand how the Fed effects the fed funds rate. Here it says:
Once the Federal Open Market Committee deems that economic conditions
warrant a change in the money supply through ...
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How often do banks borrow from the Federal Reserve?
Though I've seen plenty of articles talk about in what circumstances banks borrow from the Fed, I haven't seen any quantification on that note. On average, what percent of the money that banks lend ...
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Why did the Fed raise interest rates between 2004 and 2006?
Between June 2004 and August 2006, the Fed raised interest rates again and again, because they were "...growing more uncomfortable about inflation".
Looking at the graph below, inflation did increase,...
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What is the FRB's Z.1 table L.218
I'm updating a document that cites this:
As of December 2011, 67 percent of home mortgage debt was either
securitized through agency or non-agency MBS or held on the balance sheets
of Fannie ...
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Monetary Policy and the Yield Curve PART ONE
As I understand it the Fed has 3 tools for moving interest rates to combat inflation/unemployment: the discount rate, Fed Funds rate and open market operations.
I'm trying to understand how the yield ...
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Federal Reserve Notes vs Coins
More of a two part question. In the current system (Fiat only currency), why is a Federal Reserve Note booked as a liability (on the Fed balance sheet), but a Coin is not booked as a liability by the ...
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How much leverage has the Federal Reserve taken on today (Jan 2016)?
http://nymag.com/daily/intelligencer/2015/12/big-short-genius-says-another-crisis-is-coming.html?mid=twitter-share-di
What makes you most nervous about the future? Debt. The idea that
growth will ...
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What does the Federal Reserve intend to do with bonds it has purchased under QE?
In New York Magazine's interview with investor Mike Burry (made famous by The Big Short), he claims Quantitative Easing has left the Federal Reserve with an extraordinarily high leverage ratio:
...
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Is Eurodollar borrowing close substitute for Fed funds borrowing?
It is often stated that eurodollar borrowing is clost substitute for Fed funds borrowing. In other words, when US banks cannot fund themselves domestically, they might go to the eurodollar market and ...
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By what steps and contracts does new money enter the economic system?
Like many noneconomists who read about economic history and finance, I always remain somewhat baffled by the opaque generation of currency under the federal reserve system. My understanding is that ...
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Can absence of inflation be accounted for by a reconfigured class structure?
A previous and oft-heard question asked why no inflation results from the Fed pumping money into the economy.
Are we simply seeing a methodical wage suppression, thus no official "inflation," while ...
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When the Fed increases the money supply, does any of the additional supply go directly to the government?
When a central bank increases the money supply, how much of it goes directly into the government purse? Say for example:
The money supply is $150
The populace has $100
The government has $50.
If the ...
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How to find interest rates with fractional reserve banking?
As I understand it, interest rates are set by supply and demand, like any price. Money can be thought of like any other finite commodity. Lenders are willing to supply a certain amount of money at ...
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Why does the Fed control interest rates?
The Fed more or less controls interest rates using open market operations, but why?
Why are interests rate not controlled by supply and demand?
cph2117
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Does the Fed use misinformation as a tool for good monetary policy?
The Congress established the statutory objectives for monetary
policy--
maximum employment,
stable prices, and
moderate long-term interest rates
--in the Federal Reserve Act.
http://www....
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Why is the Fed considering increasing interest rates?
America's Fed Funds rate is below 1% and its growth rate is 3.9%. India's lending rate is approximately 9.5% and its growth rate is 5.1%.
India just dropped its lending rate while the US is ...
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Federal Reserve capital injections
What were the specific conditions that the Federal Reserve attached to the capital injections forced upon the major Wall St. banks during the Great Recession? How and why do they differ from normally ...
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Federal Reserve conditions [duplicate]
Does the Federal Reserve have conditions attached to the money that's created and distributed to major banks?
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Why did the Federal Reserve change the data about USA GDP?
This is the data published on 20 March 2013 FOMC meeting:
(http://www.federalreserve.gov/monetarypolicy/fomcprojtabl20130320.htm)
20 March 2013,
Change in real GDP (actual):
year 2008: -3.3%
year ...
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How and when is M0 money created?
The Federal Reserve Coin and Currency Service Website
describes their currency order process thus:
The 7.2 billion notes included in the FY 2015 order reflect the Board’s estimate of net demand for ...
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Does the current situation of excess reserve imply failure of QE?
Excess reserve @ Fed
In the past it was assumed that excess reserves should be kept around 0 and banks should be lending to each other as much as they are borrowing. The central banks would correct ...
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