An excellent article in the New York Times this week detailed the mechanics of how the Fed will raise rates in this post-Quantitative Easing environment. The main point of the article was that setting Fed Funds to a new target level would not result in much change, given how little Fed Funds trading there is and how much cash is currently floating around. Rather, there are two major policy moves the Fed can make that will impact interest rates. Incidentally, these two actions have direct implications for securities finance, repo and rates businesses.
