Discussion in 'Economics' started by Daal, Aug 17, 2007.
Does anyone have data on this?I assume its a pretty reliable indicator of future cuts
It's always cut (or raised) in tandem with changes in the fed funds rate. I can't remember it ever being lowered independent of the fed funds rate.
how old are you
Not old enough, apparently.
Here's the data
The last time they cut the discount rate independently of the fed funds rate was Jan 4, 2001.
when the discount window failed to predict next fed funds it usually took a long time between the changes, so its a decent indicator
it seems FF leads the discount, in Jan '01 they dropped FF by 1/2 pt and the discount followed by 1/4 on two consequitive days, in the late 1990's there were a bunch of fed funds announcements without corresponding discount rate change, so the discount cut without FF change is unprecedented, no?
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