Does the Fed Control Interest Rates?
The Review of Asset Pricing Studies, Forthcoming
6 Pages Posted: 5 Aug 2012 Last revised: 9 Nov 2020
Date Written: June 29, 2013
My paper, “Does the Fed control interest rates?” is in the 2013 Review of Asset Pricing Studies (Volume 3, pp. 180-199). The paper finds that the Fed controls the Federal Funds (FF) rate (the overnight rate on interbank borrowing of reserves). Other short-term rates are related to FF, but they take long swings away from FF, and the relations between FF and other rates weaken quickly for longer maturities.
JEL Classification: E20, E42, E43, E44, E52, E58, G12, G18
Suggested Citation: Suggested Citation