Table 28.2
Interest Rates and the Opportunity Cost of Holding Money
June 2007
June 2008
Federal funds rate
5.25%
2.00%
On
e-
month certificates of deposit (CD)
5.30
2.50
Interes
t-
bearing demand deposits
2.30
1.24
Currency
0
0
CDs minus interes
t-
bearing demand deposits
3.00
1.26
CDs minus currency
5.30
2.50
Source:
Federal Reserve Bank of St. Louis.
Source:
Federal Reserve Bank of St. Louis.