Federal Reserve Charts: Monitor These Charts Weekly if You Want to Get an Early Warning of Problems Ahead.
Here are the Federal Reserve charts that I regard as highly useful for predicting the next phase of the business cycle. To view any chart, click on its title. (You must have Adobe's Acrobat Reader installed.)
In my department on Federal Reserve Policy, I comment on these charts, plus other materials issued by the Federal Reserve System and by FED-watchers. This department is in FOR MEMBERS ONLY.
To understand the Federal Reserve System, begin with this video:
The much-publicized rate, the Federal Funds rate, is in fact a publicly stated target rate. The real Federal Funds rate is the rate at which banks lend to each other overnight. The free market sets this rate, and it is rarely quoted or even mentioned. What gets quoted is the Federal Open Market Committee's target rate. You can trace its recent history here:
I wish the following were in chart form. It is a table. The Federal Reserve publishes this weekly. Pay attention to this statistic: Deposits with F.R. Banks, other than reserve balances. This is the money that commercial banks deposit with the Federal Reserve instead of lending. This money is sterilized. It does not get lent, so it does not become part of the fractional reserve process. It reduces the money multiplier. It offsets increases in the monetary base. It rose in late 2008 by a staggering half a trillion dollars.