CSUSM IOR Is the Interest Rate by Banks Question
- The Fed wants to lower the federal funds rate, which is currently 3 percent, to somewhere in the range of 2.0 – 2.5 percent.Explain how the Fed goes about doing this today using the IOR and ON-RRP rates.In the process of explaining your answer, make sure to explain what banks and nonbank financial institutions will do in response to whatever it is that you have the Fed do.
