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发帖数: 978 | 1 The Federal Reserve announced yesterday that it raised the "discount rate"
by 25 basis points to 0.75%. This move was meaningless because very few
institutions use the Fed's discount window, in comparison to more widely
used overnight lending. The current balance of discount window borrowing is
only $14 billion, compared to the $1.1 trillion in excess reserves currently
being hoarded by banks.
By the Fed raising the discount rate but not the overnight federal funds
rate, they are clearly trying | s*******e
发帖数: 432 | 2 Increasing the discount rate diminish the possibility to continue to supply the system with more new money. However, the situation currently is a little bit interesting. Mixed with depressed economy which means lower demand for money and more money supply injected by Fed last year, this combination pushed down the interest very low. Thus banks will borrow from each other instead of from Fed also banks are flush of money now. In those situation, a short-term increase money supply should not cause |
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