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Monetary Policy

Nov 29, 2017

Here are the target upper limit for Federal funds,
and the realized interest rate, both on a daily basis. Rock steady. As you can see, other short-term rates track this closely. Of course most businesses need finance longer than a month or even three; no individual building a home cares [or should care – stay away from variable rate mortgages!] about anything other than a 20- or 30-year interest rate.

Compare this with the "monetarist" period during Paul Volcker's chairmanship of the Fed. Interest rates of course were high, but they were also volatile. See for yourself:

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