1. Analysts still doubted the Fed would cut the interest rate on overnight loans among banks -- but figured the economy was solid and the outlook for corporate profits good. 2. As the overnight loan rate has risen, investors have started to wonder whether that determination might be fading. 3. Banks pledge government debt securities or U.S. dollars as guarantees for overnight loans from the central bank. 4. After both the Fed and the Bank of Japan trimmed overnight loan rates late last week, many investors speculate the German central bank will follow suit. 5. Broaddus is a voting member of the Federal Open Market Committee, which sets the target for the federal funds rate on overnight loans among banks. 6. By adding money to the banking system, the Fed allows commercial banks to charge each other a lower interest rate on overnight loans. 7. But Tuesday investors interpreted Greenspan as saying the Fed might not cut interest rates on overnight loans among banks soon. 8. By pumping money into the banking system, the Fed allows commercial banks to charge each other a lower interest rate on overnight loans. 9. Central banks often try to wean banks and investors off of overnight loans when interest rates may rise. 10. Canadian government bonds were little changed as investors debated whether the Bank of Canada will cut its overnight loan rates in the next few weeks. |
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