Who (specifically) receives the "interest" on Federal Reserve Interest Rates?

Question

This includes the interest gained on "loaning" billions of dollars daily on a war of borrowed monies?

Answer 1

The Federal Reserve is "owned" by it's member banks. Therefore it's "members" receive the interest. Basically it's banks creating and lending money to each other, with a board appointed by the Federal government minding the store.

Answer 2

There are different types of loans related to your question. Let's run through them.

- Loans based on the Discount Rate - These would be member banks getting loans from the Fed.

In this case, the Fed gets all the interest. But as much publicity a change in the Discount Rate gets, very few banks actually use it. More commonly banks use....

- Loans based on the Federal Funds rate - These are overnight loans between member banks.

The loaning bank gets the interest. It tends to be cheaper than the discount rate which is why banks prefer it over the discount window.

- Loans of billions to finance the war - These loans are through the sale of Treasury Bills on the open market. The interest rate is decided the marketplace though it is influenced by Fed interest rates.

The interest that the government pays goes to individual bond holders, about half of which is held mainly by Japan and China.

A small amount of these bonds are purchased by the Federal Reserve on the open market to collateralized currency.

- Income from interest received by the Federal Reserve - By law, all Federal Reserve income after expenses is given the Treasury at the end of the year. So 90% of the interest earned on T-Bills is returned.

Answer 3

George B - so the housing bubble changed into led to because of severe prices of interest? absurd. There are artificially low prices of interest...that is at the same time as an interest fee is what that is notwithstanding the federal reserve pushes it all the way down to a lesser p.c. instead of permitting the economy to obviously paintings its way out. it extremely is a faux fee. Low prices of interest damage fee mark downs and making an investment at the same time as helping extra idiots purchase homes that ought to no longer have sufficient money them arising extra inflation and hurting all of us. how are you going to no longer see that?

Answer 4

The Fed is nothing more than a piggy bank for the establishment and their financial centers, raping the American tax payer though inflation.

Answer 5

Like any other loan, the lender.

Answer 6

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