Why The Ruction In Money Market Function—The Fed Nationalized It

By deciding to target the Fed Funds rate after Congress amended the central bank’s mandate in 1977, the Federal Open Market Committee essentially nationalized what had been a free market rate.  Since then, whenever the FOMC wanted to adopt a looser stance to achieve the inflation and/or employment mandates set by Congress, it would lower the target for Fed funds. 

 

 

 

 

 

 

 

 

 https://www.theinstitutionalriskanalyst.com/single-post/2019/09/23/Nationalizing-the-Federal-Funds-Market