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Fed Funds Rate vs. S&P500 Index Prices |
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Federal Reserve Fed Funds Interest Rates vs Stock Prices Return to KirkLindstrom.com home page and Articles Page - Gold Charts |
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June 5, 2013: In the United States, the federal funds rate1
is the interest rate at which depository institutions actively trade
balances held at the Federal Reserve, called federal funds, with each
other, usually overnight, on an uncollateralized basis. Institutions
with surplus balances in their accounts lend those balances to
institutions in need of larger balances. The federal funds rate is an
important benchmark in financial markets.
The current target rate for the Fed Funds interest rate is a range between 0.0% to 0.25%. I show the midpoint on my graph below at 0.125%. |
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The interest rate that the
borrowing bank pays to the lending bank to borrow the funds is
negotiated between the two banks, and the weighted average of this rate
across all such transactions is the federal funds effective rate.
The federal funds target rate is determined by a meeting of the members of the Federal Open Market Committee which normally occurs eight times a year about seven weeks apart. The committee may also hold additional meetings and implement target rate changes outside of its normal schedule. Gold -
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Disclaimer: The information contained in this web site is not intended to constitute financial advice, and is not a recommendation or solicitation to buy, sell or hold any security. This blog is strictly informational and educational and is not to be construed as any kind of financial advice, investment advice or legal advice. Copyright © Kirk Lindstrom. Note: "CORE & Explore®" was coined by and is a registered trademark of Charles Schwab & Co., Inc. |