Can someone tell me if theres been an increase in the reserve requirement ratio?
Yes the reserve requirement is still at 10%. The Fed is very unlikely to raise this because if they did, due to the banking situation, a lot of banks would not be able to meet the requirement and would have to be shut down. The Fed doesn’t want this to happen at all. Typically when a recession hits, the Fed will lower the reserve requirement in order to make it easier for people to borrow money. This allows for expansion of economic activity as money is more readily available for purchases and investment. The drawback to cutting reserve requirements is that it can put banks in a dangerous position by allowing them to lever up further against their deposits. Additionally, more money supply means higher inflation, which puts pressure on consumers trying to pay for things like gas, groceries, etc. Because of the unique situation here with banks I don’t think the Fed will raise the requirement ratio. I also don’t think they will raise interest rates anytime soon. Watch out for inflation, i
