How Successful Is The Fed At Controlling Interest Rates?


from the St Louis Fed

-- this post authored by Christopher J. Waller and Jonas Crews

The federal funds rate is the main policy tool the Federal Open Market Committee (FOMC) uses to affect the U.S. economy. But the federal funds rate is not the only interest rate that matters for the U.S. economy. There are many other short-term interest rates and long-term interest rates that affect the U.S. economy.

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 more WWRT

What We Read Today 23 July 2016

Econintersect: Every day our editors collect the most interesting things they find from around the internet and present a summary 'reading list' which will include very brief summaries (and sometimes longer ones) of why each item has gotten our attention. Suggestions from readers for 'reading list' items are gratefully reviewed, although sometimes space limits the number included.

This feature is published every day late afternoon New York time. For early morning review of headlines see "The Early Bird" published every day in the early am at GEI News (membership not required for access to "The Early Bird".).


Every day most of this column ("What We Read Today") is available only to GEI members.

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 more features, analysis, studies, and news published in the last week

Fed Communication And The Zero Lower Bound

from the San Francisco Fed

-- this post authored by Carlos Viana de Carvalho, Eric Hsu, and Fernanda Nechio

After the onset of the global financial crisis, the Federal Reserve had to rely on other tools - including communication - to work around the constraints of being unable to lower the federal funds rate below zero. One way to assess how effective these communications were is by estimating how interest rates on bonds with different maturities reacted to Fed communications before and after the zero-bound period. A measure based on news reports of Fed communications suggests that this tool gave the Fed some ability to affect long-term yields through its communications.

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Infographic Of The Day: Shuffling Cards

Someone with the lowest experience with cards will still be able to perform the perfect shuffle.

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Video of the Day:

Neil deGrasse Tyson explains 10 things that we have heard all our life and re-told but are completely false. There is a sound system failure at about 2 minutes, but it is recovered.

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The Week Ahead: Will The Election Help The Market?

 more opinion

Trump Doesn't Need To Win The Popular Vote To Be President

Written by John Lounsbury

We recently pointed out that if only a total of 278,000 votes for Obama had switched to Romney in 2012 that Romney would have won. If the switches had been made in just 3 states, Florida (38,000 out of 8.474 million or 0.45%), Ohio (84,000 out of 5.581 million or 1.5%) and Pennsylvania (156,000 out of 5.754 million or 2.7%), Obama would have been a 1-term president.

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 USA economy at a glance (boxed items are updates in last 7 days)

15 July 2016: ECRI's WLI Growth Index Improved

ECRI's WLI Growth Index which forecasts economic growth six months forward was improved and remains in positive territory for the 17th week - after spending the previous 35 consecutive weeks in negative territory. ECRI has released their coincident and lagging indices and is reported below.

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