Wikinvest Wire

What's the Fed funds rate?

Friday, October 03, 2008

Those thinking that a rate cut from the Federal Reserve may soon follow the passage of the $700 billion bailout bill would already be a couple weeks behind "events on the ground".
IMAGEWhile the rate cut has not yet been formalized, an event that will have at least a temporary psychological impact on financial markets, the mechanics of a lower Fed funds rate have been in place since the middle of last month.

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Aaron Krowne said...

Note that 3-month money is even more suppressed, yield-wise.

This is probably because of capital flight dynamics from commercial paper.

Tim said...

And longer durations were yielding practically nothing as well. I guess the difference is that the Fed doesn't control these other rates like it's supposed to control the Fed funds rate.

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