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Effective Federal Funds RateEffective Federal Funds RateEffective Federal Funds Rate

Effective Federal Funds Rate

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US Economic Growth: charting the GDP+GDI averageThe latest GDP number suggests inflation-adjusted annual growth of 4.2%. However, gross domestic income (GDI) (produced by the Bureau of Economic Analysis ) Both the GDP and GDI are estimates of economic growth (with one focused on expenditure and the other on income). The GDP-GDI average suggest economic growth rate to be in the 3% range. This average may prove to be a useful early warning of economic conditions as investor worries grow over "peak growth" and anticipation of the next recession. This average can be charted using data from FRED & Quandl: ('QUANDL:FRED/A261RL1Q225SBEA'+'QUANDL:FRED/A191RL1Q225SBEA')/2 More info: www.bloomberg.com
FRED:FEDFUNDS
by dime
DATA VIEW: CURRENT AND PERSPECTIVE FEDERAL FUNDS RATERecent expectations in the media regarding Federal Reserve rate hike look a bit overblown. What the Fed is actually planning to raise is the Target Range for the Effective Federal Funds Rate. The Effective rate, however, now trades firmly below the upper border of the range (0.25%), signalling no actual pressure to raise the Target Range. The nature of this phenomenon is examined in detail in a 2009 NY Fed paper "Mechanics of a Graceful Exit" (www.newyorkfed.org) One of the key conclusions from the paper is a proposition that there is just not enough demand for Federal Funds on the market to push the Effective Rate closer to the upper band of the Target Range. It is thus very likely that the "rate hike", if there is any, will have only "media hype" effect on financial markets, while the Effective Rate can even trade below the new Target Range for some time.
FRED:FEDFUNDS
by Killy_Mel