Session 15: Fixed Income: Basic Concepts
Reading 64: Understanding Yield Spreads
LOS a: Identify the interest rate policy tools available to a central bank (e.g., the U.S. Federal Reserve).
If the Federal Reserve wishes to lower market interest rates without changing the discount rate, it can:
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A) |
buy Treasury securities. | |
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B) |
raise the yield on Treasury securities. | |
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C) |
increase bank reserve requirements. | |
Buying Treasury securities pumps money into the economy, lowering interest rates. Higher reserve requirements will restrict the money supply, causing rates to rise. The Federal Reserve has no direct control over the yield on existing Treasury securities. | 
发表于 2011-3-30 14:47
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