The success of Fed intervention depends in part on how closely changes in long-term interest rates follow changes in short-term interest rates.

Question

Quizplus · Accepted Answer

This statement is true because the Federal Reserve's monetary policy relies on its ability to influence short-term interest rates, and changes in long-term interest rates are often tied to changes in short-term rates. If long-term rates do not follow short-term rates as expected, the success of Fed intervention may be limited.

The Success of Fed Intervention Depends in Part on How