In 2001, the FOMC Lowered the Target Federal Funds Rate

question 33

Essay

 In 2001, the FOMC lowered the target federal funds rate eleven times, cutting the rate from 6½ percent to 1¾ percent. Why didn't the Fed just cut the rate by larger amounts early on? 

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Definitions:

Tension-building Phase

In the context of domestic violence, the initial stage of the cycle of abuse where tension and stress start to increase between the abuser and the victim, often leading to an abusive incident.

Acute Battering

An intense form of physical violence and abuse, typically within an intimate relationship, characterized by severe, often erratic attacks.

Honeymoon Phase

The initial period in a relationship characterized by intense feelings of attraction and happiness, often without conflict.

Reconciliation Phase

A period in a relationship where parties work towards resolving differences and restoring harmony after conflict or separation.