The traditional view of the monetary transmission mechanism rests on the premise that the Federal Reserve (Fed) has full control over overnight rates via open market operations. By contrast, this paper tries to establish empirically the Fed's ability to manipulate overnight rates via...

The traditional view of the monetary transmission mechanism rests on the premise that the Federal Reserve (Fed) controls the level of the Federal funds rate via open market operations and the liquidity effect. By contrast, this paper argues that the Fed also manipulates the Federal funds rate...

In this paper we test the expectations hypothesis empirically by analyzing changes in three month Treasury rates after FOMC meetings. If the expectations hypothesis holds, then there should be a one-to-one relationship between changes in the T-Bill rate and changes in path revisions over the...