Does the cut in the discount rate mean the Fed has already loosened policy?
We expect profits to rise at a slow rate, but the discount rate to also rise.
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The discount rate is the rate that banks use to borrow from the Federal Reserve.
The latest directional change came on Feb. 19, when the Fed raised the discount rate.
Well, you can do what Alan Greenspan did in 2001--drop the discount rate to 1%.
Its first easing move of the crisis was a change in the discount rate.
Low interest rates reduce the discount rate on corporate earnings and cash flow, raising their present value.
The discount rate covers only loans that the Fed makes directly to banks.
The discount rate is basically a measure of what you have to be paid to put off current gratification.
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The commodities added to the returns of all five equity styles during periods when the Fed tightens the discount rate.
In 1994 the discount rate was raised four times prompting investors to flee bond funds en masse (see graph below).
The discount rate for public universities fell modestly in 2012, said Mr. Nelson of Moody's, after rising from 2007 to 2011.
The discount rate is the interest rate that the central bank charges commercial banks that need to borrow additional reserves.
By reducing the discount rate, the Fed intentionally abandoned the traditional one percent differential in order to deal with the crisis.
The cut to the discount rate was requested by the boards of the Fed district banks in Boston, New York, Cleveland, St.
Hence, the Fed entered the crisis with the Federal Funds target rate at 5.25 percent and the discount rate at 6.25 percent.
The higher the discount rate, the smaller the liability appears to be.
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In their version, the legislation was a done deal in the spring when Ms. Raimondo cut the discount rate and first floated the reforms.
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But meanwhile, the Federal Reserve has cut the discount rate three percentage points since last September, and may lower it to two percent this week.
Having the discount rate higher meant that, in normal times, borrowing in the Federal Funds market would be less expensive than borrowing from the Fed.
First, as the discount rate is at the lowest level it has been in decades, forest assets are much more competitive with other asset classes.
Given Japan's weakened economy, credit cannot be tightened, but with the discount rate already at a record low 0.5%, there is little scope to loosen either.
The Fed even narrowed the penalty banks paid for using discount window money, moving the discount rate closer to the Federal funds rate during the crisis.
That can be done by making one or two more discount rate only moves, or by raising both rates together with the discount rate going up more.
This makes it all the more surprising that some companies pay little attention to the impact on the discount rate of changes in their cost of capital.
Thus that risk must be raised: which in turn raises the discount rate that must be used and lowers the social cost of carbon emissions in the present.
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In the years immediately preceding the latest financial crisis, the Fed worked to restore the discount rate as a penalty rate somewhat higher than the Federal Funds rate.
The uncertainty has a big impact on the discount rate.
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However, during unusual periods of reserve shortages in the banking system, the Federal Funds rate would be bid up above the discount rate and trigger borrowing from the Fed.
The Fed would use the discount rate rather than the federal funds market to supply or withdraw credit in response to any imbalance between supply and demand for it.
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