I can still stop this ... -- Prelude. Main Street ; In the groves of academe ; Governor ; In the maestro's orchestra ; The subprime spark ; Rookie season -- The crisis. First tremors, first response ; One step forward ; The end of the beginning ; Bear Stearns : before Asia opens ; Fannie and...

First, we show that the interest rate on Federal funds is extremely informative about future movements of real macroeconomic variables, more so than monetary aggregates or other interest rates. Next, we argue that the reason for this forecasting is that the funds rate sensitively records shocks...