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Federal Reserve Bank of San Francisco
FRBSF Economic Letter
Can monetary policy influence long-term interest rates?
Òscar Jordà
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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Òscar Jordà, "Can monetary policy influence long-term interest rates?" , Federal Reserve Bank of San Francisco, FRBSF Economic Letter, number 09, 2005.
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Keywords: Monetary policy ; Interest rates ; Federal Open Market Committee
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