From day to day, the amount of reserves a bank wants to hold may change as its These operations are conducted by the Federal Reserve Bank of New York. How does the Fed decide the appropriate setting for the policy instrument?
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www.frbsf.org/publications/federalreserve/monetary/tool...
www.frbsf.org/publications/federalreserve/monetary/tools.html
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Apr 9, 2009 Does the Federal Reserve control or set the prime rate? balances that depository institutions hold on deposit at Federal Reserve Banks...
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www.federalreserve.gov/generalinfo/faq/faqmpo.htm
www.federalreserve.gov/generalinfo/faq/faqmpo.htm
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Reserve requirements are the amount of funds that a depository institution must hold in reserve against specified deposit liabilities. Within limits specified by law, the Board of Governors has sole authority Depository institutions must hold reserves in the form of vault cash or deposits with Federal Reserve Banks.
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www.federalreserve.gov/monetarypolicy/reservereq.htm
www.federalreserve.gov/monetarypolicy/reservereq.htm
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The presidentially appointed Board of Governors of the Federal Reserve ..... are only required to hold a fraction of their depositors' money in reserve. The term "elastic currency" in the Federal Reserve Act does not just mean the...
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en.wikipedia.org/wiki/Federal_Reserve_System
en.wikipedia.org/wiki/Federal_Reserve_System
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``It's still possible that the Fed may adjust rates lower, though right now the Fed is very comfortable on hold,'' said Peter Kretzmer, senior economist at Bank of America Corp. in New York. ``Underlying demand remains moderate, and inflation pressures are generally receding.''
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www.bloomberg.com/apps/news?pid=20601087&sid=azP4ypS6fk...
www.bloomberg.com/apps/news?pid=20601087&sid=azP4ypS6fkFA&refer=home
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The Federal Reserve requires depository institutions (commercial banks and other financial institutions) to hold as reserves a fraction of specified deposit liabilities. From 1979 to 1982, when Paul Volcker was chairman of the Federal Reserve, the Fed tried to control nonborrowed reserves to achieve its monetary target.
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www.econlib.org/library/Enc/MoneySupply.html
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Because the regulations to hold assets that did not earn interest (prior to October, 2008, the Fed did not pay interest on bank deposits) were costly for most banks, most new banks during the 1960s and 1970s Banks can hold more reserves than are required. Any reserves above what are required are excess reserves, or:
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ingrimayne.com/econ/Banking/FedMonPol.html
ingrimayne.com/econ/Banking/FedMonPol.html
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“(The GDP report) is ideal from the Fed's perspective of keeping policy on hold, despite concerns that inflation may not moderate,” said John Ryding, chief economist at Bear Stearns. “The report is consistent with moderate economic growth and a slight easing in labor market pressures.” ...
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www.msnbc.msn.com/id/18541306/
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Many analysts believe the Fed could remain on hold until this time next year unless the housing problems worsen to such an extent that the central bank feels the need to cut rates in the fall. Fed policymakers hold interest rates steady...
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www.msnbc.msn.com/id/19485939/
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