- Bloomberg.com – The Fed Is Losing Its Grip on U.S. Interest Rates Once Again
Fed funds is unusually close to the low end of policy range
This could prompt yet another tweak to a rate called IOER
Although the Federal Reserve has calmed money markets during the past two months, success has a downside: The main interest rate that officials try to wrangle is getting close to the edge of the range they’re targeting. Actions including the Fed’s recent repo-market liquidity injections and Treasury-bill purchases have pushed the effective fed funds rates down to 1.55%. That’s still within the 1.50%-to-1.75% band where central bankers want it to be, but it’s unusually near the lower boundary. Some are worried it could dip below.
So What Does This All Mean?