The Economy in Perspective
On the policy trail … The Federal Open Market Committee has maintained its federal funds rate target at 1% for almost a full year, by most reckonings a considerable length of time. With inflation close to 1% and inflation expectations also very low, the real federal funds rate has stayed in the neighborhood of zero during that period. This situation is unusual but not unprecedented—the FOMC set the real funds rate near zero for a period in the aftermath of the 1990–91 recession.
Suggested citation: "The Economy in Perspective," Federal Reserve Bank of Cleveland, Economic Trends, no. 04-05, pp. 01, 05.01.2004.