Fed funds rate falls short: Kansas City Fed paper
A Kansas City Federal Reserve paper, published in its Fourth Quarter Economic Review for 2010, said greater weight has been placed on the interest rate charged for reserves as the federal funds rate alone was no longer an effective policy tool.
George Kahn, the paper's author, said the huge increase in reserves and virtually zero federal funds rate as part of the Fed's crisis fighting measures rendered the traditional mechanism for setting the target federal funds rate "unworkable".
Kahn notes
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