29 Oct 2019

Examining recent developments in Fed monetary policy

In September 2019, the US short-term overnight lending rates, spiked from a typical 2.21% to 8%.  The financial news was quick to point out that this was a sign that the system was unequivocally broken as the Fed were unable to control their own benchmark Fed Funds Rate (FFR) which moved to 2.30% just as the FOMC meeting was going to inform the market the reduction of the FFR to a working range of 1.75%-2.00%. Coming on the back of other negative data releases such as weakening ISM numbers and inverted yield curves, contributing analyst Nathan Batchelor examines whether the Fed has been able to stabilise these benchmark rates with the recent developments in monetary operations.

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