After the Fed announces its new target range for Fed Funds, is there a set number of days before actual implementation?
If not, is there a convention, like within a week?
I'm wondering, because the Fed announced the new range of 3.00-3.25% on September 21, but as of end-of-day, September 22, the Treasury shows a 1M T-Bill rate of 2.73%, indicating that the new range hasn't been implemented yet.
Fed announces its new target range for Fed Funds...
...I'm wondering, because the Fed announced the new range of 3.00-3.25% on September 21, but as of end-of-day, September 22, the Treasury shows a 1M T-Bill rate of 2.73%, indicating that the new range hasn't been implemented yet.
They don't set the rate for T-Bills.
From their Implementation Note issued September 21, 2022
The Board of Governors of the Federal Reserve System voted unanimously to raise the interest rate paid on reserve balances to 3.15 percent, effective September 22, 2022.
Banks are required to have funds held in reserve. When one bank is a little short, and another has some excess reserves, this the rate that the funds are borrowed.
The federal funds market consists of domestic unsecured borrowings in U.S. dollars by depository institutions from other depository institutions and certain other entities, primarily government-sponsored enterprises.
T-bills and the like aren't set by the federal reserve. They are set via auction.
