Cleveland Fed President Open to Revising Policy Rate Target

Loretta Harker highlights shifts in money market structure and suggests evaluating alternatives to the current federal funds rate.

Summary

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Terms & Concepts
  • Federal Funds Rate: The interest rate at which U.S. banks lend reserve balances to other banks overnight.
  • Money Market: A segment of the financial market in which short-term borrowing and lending occur, involving high-liquidity, low-risk securities.
  • Policy Rate Target: The benchmark interest rate set by a central bank to guide monetary policy and influence economic activity.