In the late 1970s the money stock was growing at a faster rate than desired, the rate of inflation was accelerating, and the dollar was steadily depreciating in the foreign exchange markets. In an attempt to reverse these developments the Federal Reserve on October 6, 1979 announced several...

Observed differentials among yield series for different types of long-term instruments--U.S. government bonds, municipal bonds, corporate bonds and residential mortgages--vary considerably over time.

The purpose of this paper is to explore the reasons underlying the variable and sometimes very large differentials between United States Treasury bill rates and private sector U.S. money market rates of comparable maturity.

The Treasury bill rate is generally viewed as the representative money market rate.