Chapter
Understanding How the Federal Funds Rate Works
27:25 - 31:47 (04:22)
The Federal Funds Rate affects interest rates for everything and is usually kept stable to avoid frequent tax changes. When increased, it causes better interest rates, and when decreased, it causes worse rates for regular people.
Clips
The speakers discuss the movie "Head" by The Monkees and briefly touch on its connection to The Beach Boys' "Smile."
27:25 - 27:47 (00:22)
Summary
The speakers discuss the movie "Head" by The Monkees and briefly touch on its connection to The Beach Boys' "Smile."
ChapterUnderstanding How the Federal Funds Rate Works
EpisodeThe Scintillating World of Interest Rates
PodcastStuff You Should Know
The Fed funds rate is the rate at which banks lend money to each other overnight to satisfy reserve requirements, and it is determined by supply and demand.
27:47 - 28:37 (00:50)
Summary
The Fed funds rate is the rate at which banks lend money to each other overnight to satisfy reserve requirements, and it is determined by supply and demand. Although the Fed indirectly controls this rate, they let the market decide and manipulate it accordingly.
ChapterUnderstanding How the Federal Funds Rate Works
EpisodeThe Scintillating World of Interest Rates
PodcastStuff You Should Know
The Federal Reserve makes use of government securities to regulate the funds rate, which regulates the level of borrowing and economic growth, ultimately affecting taxes, interest rates, and everything else, for the general public.
28:37 - 31:47 (03:09)
Summary
The Federal Reserve makes use of government securities to regulate the funds rate, which regulates the level of borrowing and economic growth, ultimately affecting taxes, interest rates, and everything else, for the general public. This process is limited to an elite group of primary dealers who buy and sell treasury bills with the Fed.