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Did The Fed Just Back Down? | Joseph Wang & Michael Ippolito

Forward Guidance

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The Limits of the Reverse Repo Facility

There's a limit to how much the RFP could be lowered. It cannot be lowered more than five basis points because the Fed has a target ban where it wants to keep interest rates. The lower Fed fund rate is 5.00% now, Upper bound is 5.25%. And that's where all the action is in that range.

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