Question

In August 2007 and in March 2008, the Federal Reserve Board reduced the discount rate to ease liquidity conditions for banks. Plot discount window borrowing (FRED code: DISCBORR) between January 2007 and December 2008. As a second line, plot on the right axis the difference between the discount rate (FRED code: DPCREDIT) and the fed funds rate target (FRED code: DFEDTAR). Did narrowing the spread between the discount rate and the federal funds target rate trigger the borrowing surge in September-October2008?



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  • CreatedOctober 02, 2014
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