The federal funds rate is ____ the yield on a Treasury security with a similar term remaining until maturity.

Question

Quizplus · Accepted Answer

The federal funds rate tends to be close to the yield on a Treasury security with a similar term remaining until maturity because both rates are influenced by similar economic factors, such as inflation and the overall level of interest rates in the economy. While there may be some periods where the federal funds rate is higher or lower than the Treasury yield, over the long term they tend to be relatively close.

The Federal Funds Rate Is ____ the Yield on a Treasury