Journal Article

Can monetary policy influence long-term interest rates?


Abstract: This Economic Letter argues that the Fed exercises significant influence on long-term rates. The key to reconciling this position with the empirical evidence resides in the gradual pattern of policy interventions characteristic of the Federal Open Market Committee (FOMC). This pattern, a likely reflection of the Fed's response to changes in economic activity in the long run (see Rudebusch 2002), is essential to understanding fluctuations in long-term rates.

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File(s): File format is application/pdf https://www.frbsf.org/wp-content/uploads/el2005-09.pdf

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Bibliographic Information

Provider: Federal Reserve Bank of San Francisco

Part of Series: FRBSF Economic Letter

Publication Date: 2005

Order Number: 09