Question: In August 2007 and in March 2008 the Federal Reserve
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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