Abstract
We analyze the impact that reserve levels accumulated through the preceding day in a reserve maintenance period have on the level of the federal funds rate each morning prior to when open-market operations are arranged. Our empirical results and other evidence provided about intraday patterns of the federal funds rate demonstrate that the pace at which reserves are supplied over a maintenance period to meet banks' total reserve requirements is an important determinant of federal funds rate behavior.
Authors
- Spence Hilton
- Warren B. Hrung
JEL codes
- E5
- G21