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Money and Financial Markets

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At its January 27–28 meeting, the Federal Open Market Committee (FOMC) left the federal funds rate target unchanged at 1% and the primary credit rate at 2%. Short-term interest rates and the federal funds rate have moved roughly in tandem, dropping significantly since late 2000. At the June 25 FOMC meeting, the funds rate was lowered to its current target level of 1%, and the yields on three-month, six-month, and one-year Treasury bills roughly followed suit. Just before that meeting, however, longer-term interest rates increased markedly. Although they have decreased slightly since then, they remain significantly above their June 2003 lows.

Suggested citation: "Money and Financial Markets," Federal Reserve Bank of Cleveland, Economic Trends, no. 04-02, pp. 05-07, 02.01.2004.

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