Time decay in Fed funds rate change

Mukul Pal ·

Interest rates are supposed to be a central banker domain. To suggest that time proportion and pattern acts here too is no short of economic blasphemy. We took the data for all Fed Funds rate changes since 1994, tabulated them and sorted the changes in time between the rate cuts. We got the classic time decay function yet again. Is this coincidence or reality? Time proportionality causes proportional economic cyclicality and consequently proportionality in the actions of the Fed.


ORPHEUS RESEARCH AT REUTERS – UNITED KINGDOM
ORPHEUS RESEARCH AT REUTERS – USA
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