What are Fed Funds ?

Question of the week

Fed Funds (Federal Funds) are loans that US banks make to each other to meet the reserve balance requirements set by the Federal Reserve. These loans are primarily made on an overnight basis (24-hour term). Banks with excess reserves lend them to those with cash deficits. The borrowed funds are placed with the Federal Reserve in order to meet each bank’s daily reserve needs. The daily interest rate charged in this market is called the fed funds rate.

See also : https://latribune.lazardfreresgestion.fr/en/we-often-hear-that-long-term-growth-rates-and-low-prices-argue-in-favour-of-investing-more-in-emerging-markets-what-do-you-think/

The opinion expressed above is dated  17 September 2020, and liable to change.

This document is not pre-contractual or contractual in nature. It is provided for information purposes. The analyses and descriptions contained in this document shall not be interpreted as being advice or recommendations on the part of Lazard Frères Gestion SAS. This document does not constitute an offer or invitation to purchase or sell, nor an encouragement to invest. This document is the intellectual property of Lazard Frères Gestion SAS. LAZARD FRERES GESTION – a simplified joint stock company with share capital of €14,487,500 – Paris Trade and Companies Registry No. 352 213 599. 25, RUE DE COURCELLES – 75008 PARIS, FRANCE