Fed has little control over rates

The Fed's ability to control short-term interest rates may be greatly exaggerated, research published by the St Louis Fed suggests.

Though there is little doubt that the Fed has controlled the overnight federal funds rate since the market has become aware that the Fed is targeting the funds rate, virtually no evidence exists that the central bank has done so via the traditional liquidity effect, the paper argues, adding that it is now commonly accepted that the Fed controls the funds rate through

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