So the Fed Funds Rate directly affects the rate that large commercial banks borrow at. What is the main way that it goes from there to the consumer? Business loans? Mortgages? Refinancing of previous loans? How long would it take for these to take effect?
In practice, mortgages and loans dont fall at the same rate as Fed rate is lowered. This is because it becomes much riskier to lend money when the unemployment rate is high, businesses may fail, etc. In 2008 when they banks were bailed, they did not go on a lending spree.
Your thinking that short-term and ultra-short term lending makes it directly to the consumer is misguided. Here is a right now article on Mortgage Servicers... https://www.cnbc.com/2020/03/23/cor...inquencies-could-bankrupt-payment-system.html Another simple example to ponder... A company(or division) with a 2 million dollar payroll, and 5 million invoiced for 10 days from now, and 5 million in treasurys due in 3 months. All necessary fixed costs like rent, electric, cells, insurance, taxes, etc, are covered with cash on hand.
OK, English is not my native tongue.... (in my language lending can both mean getting the loan or providing the loan (i.e. lending from, lending to))