Negative Federal Funds Rate?

H. Curtiss Leung hncl at panix.com
Thu Nov 7 10:57:03 PST 2002


All:

So the Fed dropped the target for the Federal Funds rate to 1.25%, which, according to the WSJ article on the rate decreases, is below the Fed's 1.8% inflation figure. So we've got a negative real interest rate for this money, yes?

Two questions:

--Has this ever happened before?

--Does this amount to a polite admission that deflation could be

a real problem?

-- Curtiss, wondering

PS. If this is obvious to the economists here, just send me stuff offlist.



More information about the lbo-talk mailing list