Journal Article
How Many Reserves Does the Federal Reserve Need to Supply?
Abstract: The level of reserves the Federal Reserve needs to supply depends on the spread between the federal funds rate and the IOR rate. If policymakers choose to operate with a near-zero federal funds-IOR spread, then reserve balances of $1.5 trillion may be required to implement monetary policy. However, if policymakers opt for a higher federal funds-IOR spread, then reserve balances of about $1.1 trillion may suffice.
Keywords: Interest rates; Federal funds rate; Reserve balances;
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https://www.kansascityfed.org/documents/498/macrobulletins-How%20Many%20Reserves%20Does%20the%20Federal%20Reserve%20Need%20to%20Supply%3F.pdf
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Bibliographic Information
Provider: Federal Reserve Bank of Kansas City
Part of Series: Macro Bulletin
Publication Date: 2019-03-06
Pages: 1-3