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Leading up to and during the Lehman Brothers collapse, overnight lending markets became quite volatile, as shown by the figure below. Effective Federal Funds Rate

Leading up to and during the Lehman Brothers collapse, overnight lending markets became quite volatile, as shown by the figure below.

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Effective Federal Funds Rate (DFF) Federal Funds Target Rate (DISCONTINUED SERIES) (DFEDTAR) 3.0 2.8 B 2.5 2.0 FF Target 1.5 (Percent) 1.0 75 - - Actual FF Rate 0.5 2008-07 2008-08 2008-09 2008-10 2008-11 2008-12 2009-01 Shaded areas indicate US recessions. FRED 2013 research.stlouisfed.org COLDTAR

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