Federal Reserve Update
Emergency rate cuts by the Fed has lowered the fed funds rate to a target rate set between 0.25% and 0.00%, but has not solved the financial crisis. Economists are predicting that the Fed will hold rates steady in 2009 until economic recovery begins possibly as soon as late 2009 or early 2010.
FOMC Meeting Update:
Next FOMC Meeting: June 23 -24, 2009
Federal Funds Target Rate: Between 0.00% and 0.25%
The implied Fed Funds rate based on recent trading on the futures contract at the Chicago Board of Trade:
June 2009: 0.19%
July 2009: 0.22%
August 2009: 0.26%
September 2009: 0.28%
October 2009: 0.33%
November 2009: 0.38%
December 2009: 0.40%
January 2010: 0.47%
February 2010: 0.49%
March 2010: 0.56%
May 2010: 0.80%
July 2010: 0.99%
Board of Governors Chairman: Ben Bernanke
FOMC Members: Timothy Geithner, Thomas Hoenig, Donald Kohn, Randall Kroszner, Frederic Mishkin, William Poole, Kevin Warsh, Charles Evans, Eric Rosengren
The Bernanke Fed
Fed chairman Ben Bernanke has led one of the most aggressive (if not the most aggressive) Federal Reserve Boards in the history of the central bank. Bernanke's Fed has led the fight against economic turmoil with two 75-point rate cuts among other rate cuts which have lowered the fed funds target rate to a historic low. The Fed has also reduced the rate at which direct loans to commercial banks are made and allowed non-banks to borrow from the same entity, has provided Fed loans to Wall Street brokerage firms, and dramatically orchestrated the rescue of Bear Stearns wtih a $29 billion loan backed by Bear Stearn's mortgage-backed securities. The Bernanke Fed may become even more powerful as a financial watchdog over the entire US financial system if a plan proposed by the Treasury Department is eventually adopted. Bernanke, as an academic scholar of the depression of the 1930s, has justified the aggressive positioning of the Fed as a necessity to prevent further economic turmoil, while some critics including former Fed Chairman Paul Volcker question the long reach of the new Bernanke-led Fed.
MoneyRates.com Forecast: Federal Funds Rate 2009
The Federal Funds rate is the benchmark overnight lending rate targeted by the Federal Reserve. Fed officials use the fed funds rate to attempt to keep inflation in their targeted range of 1% to 2%. Listed below is the money-rates.com forecast for the Fed Funds rate in 2008 and 2009:
April 2009: 0.25%
May 2009: 0.25%
June 2009: 0.25%
July 2009: 0.25%
October 2009 - December 2009: 0.50%
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