Dallas Fed says monetary policy is losing effect

According to a new paper in the Federal Reserve Bank of Dallas' Economic Letter series, monetary policy is losing its bite.

The rising integration of world financial markets means "the effects of monetary policy tightening or loosening may be substantially weakened," writes Tao Wu, a researcher with the bank.

Globalizing forces mean long-term rates are now less sensitive to the short-term rates controlled by institutions like the Fed, and this development poses "formidable challenges" for central

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