2min chapter

Forward Guidance cover image

The European Central Bank Goes On The Offensive | Daniel Neilson (LIVE)

Forward Guidance

CHAPTER

You Know What the Fed Controls Short-Term Interest Rates

The Fed funds market is now a shadow of what it once was. Most banks do not use that market really anymore. The overnight repo facility should be a floor for interest rates. Why would you accept lower lower interest on your deposits when you could put them at the Fed for a higher rate? Um right now those those financial conditions are a little bit broken.

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