How does the federal funds rate influence the long-term real interest rate? From 2009 through 2017, the
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How does the federal funds rate influence the long-term real interest rate?
From 2009 through 2017, the long-term real interest rate paid by the safest U.S. corporations fell from 5.5 percent a year to 4 percent a year. During most of that period, the federal funds rate was roughly constant at 0.25 percent a year.
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The Federal funds rate is the interest rate at which banks and depository institutions lend reserve balances to other depository institutions overnigh...View the full answer
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