http://www.bargaineering.com/articles/federal-funds-rate-vs-federal-discount-rate.html personal finance blog with anecdotes, advice and commentary. Sat, 21 Nov 2009 22:47:06 -0500 http://wordpress.org/?v=2.8.5 hourly 1 http://www.bargaineering.com/articles/federal-funds-rate-vs-federal-discount-rate.html/comment-page-1#comment-308798 Chris Tue, 30 Jun 2009 13:53:04 +0000 http://www.bargaineering.com/articles/federal-funds-rate-vs-federal-discount-rate.html#comment-308798 The Federal Funds rate is not SET by the Fed, it is targeted as the Fed cannot legally or direct dictate at what rate banks can lend to each other. The Fed can direct the rate at which banks lend to each other through various Monetary Policy Tools. The Federal Funds rate is not SET by the Fed, it is targeted as the Fed cannot legally or direct dictate at what rate banks can lend to each other. The Fed can direct the rate at which banks lend to each other through various Monetary Policy Tools.

]]> http://www.bargaineering.com/articles/federal-funds-rate-vs-federal-discount-rate.html/comment-page-1#comment-299141 Denis Mon, 02 Mar 2009 05:57:00 +0000 http://www.bargaineering.com/articles/federal-funds-rate-vs-federal-discount-rate.html#comment-299141 Because the bank has exhausted all other sources of credit, e.g. other banks do not want to lend to this bank for considerations of risk. The Discount Window is then the last resort for the bank to solve the liquidity issues for the short term. Because the bank has exhausted all other sources of credit, e.g. other banks do not want to lend to this bank for considerations of risk. The Discount Window is then the last resort for the bank to solve the liquidity issues for the short term.

]]> http://www.bargaineering.com/articles/federal-funds-rate-vs-federal-discount-rate.html/comment-page-1#comment-228914 Ken Wed, 23 Apr 2008 15:37:42 +0000 http://www.bargaineering.com/articles/federal-funds-rate-vs-federal-discount-rate.html#comment-228914 If the federal funds rate is lower than the discount rate, why would any commercial bank borrow from the Fed and pay the discount rate instead of borrowing from another bank and pay the federal funds rate? If the federal funds rate is lower than the discount rate, why would any commercial bank borrow from the Fed and pay the discount rate instead of borrowing from another bank and pay the federal funds rate?

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