AI-powered
podcast player
Listen to all your favourite podcasts with AI-powered features
The Fed's Main Way of Controlling Interest Rates
In 2008 the Fed was scrambling to stimulate the economy and started buying massive amounts of treasury bonds from the banks. So you kind of think of this as like the Fed is paying a plumber to fix the pipes. And so now the question is well how do you raise rates when some people call the amount of reserves in the banking system 'super abundant' The Fed decided to raise interest rates directly with banks rather than playing around with open market operations.