Tomorrow is the beginning of a 2-day FOMC meeting with a rate decision expected on Wednesday afternoon. All signs point to no change in the Fed Funds Rate, no hint at QE3, remaining accommodative for an extended period, a marginal downgrade in the economic outlook and a very boring press conference with the Chairman. Using the following Fed Fund Rate futures curve animation plot, we can roughly judge what is the expected direction and pace of Fed hikes. A steep upward sloping curve would mean that there are expectations for future rapid increase in rates. Using the animation we can get a feel how those expectations evolve over time.
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These prices are not based on market activity. There were no trades for this contract during the time period chosen. Bill Gross of PIMCO suggested that in the prior 15 years ending in , in each instance where the fed funds rate was higher than the nominal GDP growth rate, assets such as stocks and housing fell. A low federal funds rate makes investments in developing countries such as China or Mexico more attractive. A high federal funds rate makes investments outside the United States less attractive.
The long period of a very low federal funds rate from forward resulted in an increase in investment in developing countries. As the United States began to return to a higher rate in investments in the United States became more attractive and the rate of investment in developing countries began to fall. The rate also affects the value of currency, a higher rate increasing the value of the U.
From Wikipedia, the free encyclopedia. History of Federal Open Market Committee actions. Federal Reserve Bank of New York. Retrieved 2 October The Federal Reserve System: Archived from the original on Board of Governors of the Federal Reserve System. The New York Times. Archived from the original on July 18, New York Federal Reserve Branch. Archived from the original on December 21, Retrieved 3 April Workers in Mexico and Merchants in Malaysia Suffer". Retrieved March 18, Rising interest rates in the United States are driving money out of many developing countries, straining governments and pinching consumers around the globe.
Discount window Federal funds Federal funds rate Primary dealer. Federal Reserve Flash Crash August stock markets fall —16 stock market selloff. Hamlin — William P. Harding — Daniel R.
Crissinger — Roy A. Young — Eugene Meyer — Eugene R. Black — Marriner S. Eccles — Thomas B. McCabe — William M. Martin — Arthur F. Rosengren Boston John C. Williams New York Patrick T. Harker Philadelphia Loretta J. Evans Chicago James B. Retrieved from " https: Banking Federal Reserve System Interest rates. Articles containing potentially dated statements from September All articles containing potentially dated statements.
Delayed Quotes Block Trades. Young — Eugene Meyer — Eugene R.
Conversely, when the Committee wishes to increase the Federal Funds Rate, they will instruct the Desk Manager to sell government securities, thereby taking the money they earn on the proceeds of those sales out of circulation and reducing the money supply.