Chinese trade negotiators suddenly canceled a visit to meet U.S. farmers after they wrapped up trade talks in Washington this week.Marketsread more
President Trump also said he is "not looking for a partial deal" with Beijing, moving away from his suggestion last week that he would consider an "interim deal."Politicsread more
Progress on trade talks will determine how far market will move above new highs.Trader Talk with Bob Pisaniread more
For investors taking a breather from the chaos in August, buckle up as the market is about go crazy again, Goldman Sachs warned.Marketsread more
The Patriots released Antonio Brown only 11 days after signing the wide receiver.Sportsread more
The Wall Street Journal's report came as a top Ukraine official said President Donald Trump "is looking" for Ukraine officials to investigate business dealings of Biden's son...Politicsread more
A tour bus carrying Chinese-speaking tourists crashed near a national park in southern Utah, killing at least four people and critically injuring up to 15 others, authorities...U.S. Newsread more
Gun maker Colt announced Thursday that it will halt its production of AR-15 rifles for civilian sales, but the news might not be as exciting for gun control advocates as it...Guns and Weaponsread more
As thousands of people across the world participate in the Global Climate Strike, several Democratic presidential candidates have shared how they will take aggressive action...Scienceread more
With "tariff man" President Trump waging a tariff war and Democratic candidates pushing against big international deals, free trade has become politically homeless, writes...2020 Electionsread more
Canadian trade union Unifor said roughly 4,500 of its members have been temporarily laid off because of the GM strike so far.Autosread more
For the Fed, voting to hike interest rates is the easy part. The tough work begins as U.S. central bank officials implement the right maneuvers to ensure rates go where they want.
Essentially, the heavy lifting gets assigned to bond traders at the New York Fed who use a few tools to ensure that supply and demand work out so that the primary policy target, or funds rate, is within the range the Federal Open Market Committee expects.
If things go as Wall Street expects, the Fed will be lifting the current funds rate target from 0 to 0.25 percent to 0.25 to 0.50 percent — a number that the investors will see as a quarter-point hike, though the mechanics may not quite work out that way.
Specifically, the Fed will be using two tools: interest on excess reserves, or IOER, and reverse repurchase operations, or RRP. The former involves payments on the $2.3 trillion or so of excess reserves banks currently hold at the Fed, while the latter are short-term — almost always overnight — purchases of a security with the agreement to sell later at a higher price.
How it all works is that the New York Fed's trading desk gets its cue for what the overnight funds rate target is, then uses the IOER and RRP "such that the aggregate supply of banking reserves roughly matched prevailing reserve demand," Elad Pashtan, U.S. economist at Goldman Sachs, said in a recent report for clients explaining the process.