Federal reserves

The interest rate of a central bank, called federal funds rate, is the rate at which the central bank lends funds to commercial banks (HSBC or Western Union for example). Commercial banks require this money in order to lend to individuals and companies, and the lower the federal funds rate, the more commercial banks borrow (and vice versa).

 Since the 2008 crisis, the Federal Reserve (the central bank of the United States, known as the Fed) has kept rates very low (between 0% and 0.25%) to increase the amount of money in the economy and relaunch growth, since, from an American standpoint, more money in circulation equates to more investments. However, recent discussions have called into question this situation and plan on raising interest rates.

In the U.S: the Fed

The last time Fed raised interest rates was in 2006. It hadn’t done so since then because of its concerns about the US’s fragile economy (especially after the Yuan crisis) and low inflation. In fact, Fed would like the US inflation rate to be closer to 2%–...Read More »


Brazil's federal reserves

The Brazilian government currently has approximately $ 300 billion recorded as international reserves in the balance sheet of the Central Bank. The accumulation of this amount was given by successive surpluses in international trade (exports values greater than imports) and the inflow of foreign investments in the country .When the dollars enter...Read More »


Impact on the United Kingdom's economy

It has been years since the US Federal Bank is in an ongoing competition against the Bank of England.
Both are dominant sources of power and money in their countries, so the following question remains: which country’s central bank will move out of competition first?

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Economic crisis in Mexico

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The economic crisis has laid a pall over the world in the past years. In Mexico, a set of structural policies have been put in place in order to put an end to low productivity and informality in the labor market, as well as to inequality...Read More »


Federal reserves: an Indian perspective

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As of last week, the Indian rupee is the only emerging market’s currency to have appreciated in the past year against the dollar, despite the dollar index hitting new highs every day in anticipation of a Fed rate hike. This can be attributed to the inherent...Read More »


The German economy and the Fed

The US – Federal Reserve could be compared to the Bundeszentralbank, the “German Central Bank”. Its job is to monitor the value of the Euro and ensure its stability. Unlike the Fed, it is not responsible for unemployment rates. As the economically strongest nation in the...Read More »


The Fed's interest rates: higher or lower?

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Since the beginning of 2015, the ECB (European Central Bank) has endeavored to lower the value of its currency in order to gain competitivity in terms of international trade (a weaker currency makes for cheaper products abroad, which attracts foreign buyers). What’s more, investors were betting...Read More »