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Federal Reserve Operations: A Six-Month Review

www.newyorkfed.org/cha... Funds Rate Charts1/3/2001 eased from 6.5 to 6
1/31/2001 5.5
3/20/2001 5
4/18/2001 4.5
5/15/2001 4
6/27/2001 3.75
8/21/2001 3.5
9/17/2001 3
10/2/2001 2.5
11/6/2001 2
12/11/2001 1.75
11/6/2002 1.25
6/25/2003 1
6/30/2005 1.25
8/10/2004 1.5
9/21/2004 1.75
11/10/2004 2
12/14/2004 2.25
2/2/2005 2.5
3/22/2005 2.75
5/3/2005 3
6/30/2005 3.25
8/9/2005 3.5
9/20/2005 3.75
11/1/2005 4
12/13/2005 4.25
1/31/2006 4.5
3/28/2006 4.75
5/10/2006 5
6/29/2006 5.25
9/18/2007 4.75
10/31/2007 4.5
12/11/2007 4.25
1/22/2008 3.5
1/30/2008 3
3/18/2008 2.25
4/30/2008 2

Fed Funds Rates. From the time Greenspan changed to an "easy" money policy (1/31/01), until the time it ended (9/18/2007), the expansion coefficient (money multiplier) changed from 49 to 94 (an increase of 92%). I.e, legal reserves are no longer binding. Thus, regardless of the policy formula used, the math projected a much "tighter" monetary policy than what actually took place.