>gfucking gnot
shill tactic #38
create a problem
when there is none
tellz me all i need to know
>>21048704
the us government
no interest on loaning
fiat paper to we the
people like the central
bank does
the central bank is not
a part of the us
government, but is
instead a private entity
does the federal reserve earn interest made by loaning money to banks
The Federal Reserve, as the central bank of the United States, does not directly earn interest by loaning money to banks. Instead, the Fed earns interest on the reserve balances held by or on behalf of eligible institutions in master accounts at Reserve Banks.
Reserve Balances
The Federal Reserve Banks pay interest on reserve balances, which are the funds that commercial banks hold in their accounts at the Fed. This interest is paid to the banks for the excess reserves they hold, which are not required to meet reserve requirements. The interest rate paid on reserve balances is set by the Federal Open Market Committee (FOMC) and is known as the interest rate on excess reserves.
How It Works
When the Fed buys securities on the open market, it adds funds to the bank reserves of commercial banks. These excess reserves can be lent out to other banks, consumers, or businesses, generating interest income for the banks. The Fed earns interest on the reserve balances held by or on behalf of eligible institutions in master accounts at Reserve Banks.
Key Takeaways
The Federal Reserve does not directly earn interest by loaning money to banks.
The Fed earns interest on reserve balances held by or on behalf of eligible institutions in master accounts at Reserve Banks.
The interest rate paid on reserve balances is set by the Federal Open Market Committee (FOMC).
The Fed’s actions, such as buying securities on the open market, add funds to bank reserves, which can be lent out to generate interest income.
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