Thursday, September 17, 2009

The Federal Reserve Statement

One of the most widely followed indicators of what the Federal Reserve System is doing to influence conditions in the financial markets and the economy is known as the Federal Reserve Statement. It is published each week in the financial pres and lists the factors which supply reserve to depository institutions and those which absorb reserves. The total amount of reserves held by depository institutions at any time equals the difference between the factors supplying reserves and the factors absorbing reserves. The Federal Reserve Statement shows levels of each reserve-supplying or reserve-absorbing factor for the current and previous month or week and any changes between the two time periods. It is the changes in each reserve factor that analysts concentrate upon in attempting to understand what the Federal Reserve is trying to accomplish in the financial marketplace.

No comments: