More on the Effective Funds Rate versus the Target Rate

Without comment, here are some more links on the gap between the target and effective federal funds rates:

• The Economist:  Turning Japanese
• James Hamilton:  The anomalous fed funds market
• FT:  Fed vows to fight against deflation
• Bloomberg:  Bernanke’s Cash Injections Risk Eclipse of Main Rate
• Calculated Risk, commenting on the above Bloomberg story, attributes the following quote to William Poole, former President of Fed Bank of St. Louis, who is cited in the Bloomberg piece (although he doesn’t say when Poole spoke/wrote it):
  

  “The FOMC for many years has instructed the open market desk at the New York Fed to keep the actual Fed Funds rate close to the target Fed Funds rate. Clearly in recent weeks, it is not succeeding. As far as I can tell, it can’t be trying.”