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Smart Reasoning:

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Qaagi - Book of Why

Causes

Effects

the federal reserve(passive) set byFederal Funds Rate

fed if 2(passive) is set byfederal funds rate

the Fed ... only ableto directly influenceFederal Funds Rate

US Federal Open Market Committee ( FOMCsettingFederal Funds Rate ( FFR=2.5 %

interbank borrowing to maintain reserves at the Fed(passive) influenced byFederal Funds rate

sell U.S. Government securitiesto influencefederal funds rate

30 year fixed - rate mortgages.wall street Federal funds ratesetFederal funds rate

inflationto preventinflation

The Federal Reserve , the country 's central banking systemsetsThe Federal Reserve , the country 's central banking system

at zero sinceearly 2009 and will remain there through 2013has been setat zero sinceearly 2009 and will remain there through 2013

too highsettoo high

too lowsettoo low

to a drop in the stock market by 4 percentage points within a 30 minutes event windowleadsto a drop in the stock market by 4 percentage points within a 30 minutes event window

chieflyinfluenceschiefly

at a range of zero to 0.25 %setat a range of zero to 0.25 %

or laggingleadingor lagging

longer- term interest rates such as mortgages , loans , and savings , all of which are very important to consumer wealth and confidenceinfluenceslonger- term interest rates such as mortgages , loans , and savings , all of which are very important to consumer wealth and confidence

using a method // modified from one outlined by N. Greg Mankiwwould be setusing a method // modified from one outlined by N. Greg Mankiw

alsoinfluencesalso

short - term commercial ratesinfluencesshort - term commercial rates

-0.2 percentage pointcontributed-0.2 percentage point

forth in Section 1.1 of the Indenturesetforth in Section 1.1 of the Indenture

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Smart Reasoning:

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