At 2pm today, The Federal Reserve Open Market Committee (FOMC) will likely raise its target rate. According to the implied probabilities, there is an 84% chance of a rate hike. With another rate increase, the interest rate on excess reserves rises as well. In other words, The Fed is paying banks more interest NOT to.
The post The Fed Discourages Banks From Lending By Paying Them Interest on Excess Reserves was originally published at The Wall Street Examiner. Follow the money!