Who’s Borrowing and Lending in the Fed Funds Market Today?

Afonso, Gara; Cisternas, Gonzalo; Gowen, Brian; Miu, Jason; Younger, Josh

Discussion Paper

Who’s Borrowing and Lending in the Fed Funds Market Today?

Abstract: The Federal Open Market Committee (FOMC) communicates the stance of monetary policy through a target range for the federal funds rate, which is the rate set in the market for uncollateralized short-term lending and borrowing of central bank reserves in the U.S. Since the global financial crisis, the market for federal funds has changed markedly. In this post, we take a closer look at who is currently trading in the federal funds market, as well as the reasons for their participation.

Keywords: fed funds; reserves; Interbank market; monetary policy; Federal Open Market Committee (FOMC);

JEL Classification: E5; G1; G2;