So the Fed decides what the Fed Funds Rate (FFR) is. But this is typically a range. Say 2.5-2.75%.
How do they ensure that the FFR stays with this range? What tools do they have to enforce this? How do they know to what extent of these tools to use?
I.e. It seems they have reserves in the system, interest on excess reserves, feds own balance sheet etc.
How do these items feed into the Fed Funds Rate? And with so many moving parts how can the Fed control the FFR within their intended range?
Submitted January 11, 2019 at 02:54AM by NotBenGraham http://bit.ly/2QDOqsT
