New York Fed unveils new way to calculate funds rate

federal reserve
Federal Reserve

The Federal Reserve Bank of New York plans to change the way it calculates the federal funds effective rate (FFER) in an effort to capture a broader range of market activity.

The new technique will exploit a data collection introduced in April 2014, dubbed FR 2420, which provides an in-depth look at banks' unsecured money market loans.

This dataset will also enable the New York Fed to create an additional "overnight bank funding rate", based on transactions in both federal funds and eurodollars.

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