Open market operations and the federal funds rate
By: by Daniel L. Thornton.
Series: Working paper ;; 2005-063A; Working paper (Federal Reserve Bank of St. Louis : Online) ;; 2005-063A.
Publisher: Federal Reserve Bank of St. Louis
Published: 2005
Place of publication: [St. Louis, Mo.]
Language: eng
Format: Electronic resource
Subjects: Federal funds market (United States); Open market operations -- United States.; Interest rates -- United States -- Econometric models.
Description: "The Fed's ability to control the federal funds rate stems from its ability to alter the supply of liquidity in the overnight market through open market operations.  This paper uses daily data compiled by the author from the records of the Trading Desk of the Federal Reserve Bank of New York over the period March 1, 1984, through December 31, 1996, to analyze the Desk's use of its operating procedure in implementing monetary policy, and the extent to which open market operations affect the federal funds rate--the liquidity effect.  I find that operating procedure was used to guide daily open market operations; however, there is little evidence of a liquidity effect at the daily frequency and even less evidence at lower frequencies.  Consistent with the absence of a liquidity effect, open market operations appear to be a relatively unimportant source of liquidity to the federal funds market"--Federal Reserve Bank of St. Louis web site.
Notes: Also available in print.
Includes bibliographical references.
Title from PDF file as viewed on 9/29/2005.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.