During the financial crisis of 2007-2009 it became difficult for the Fed to hit their target federal funds rate because:

Question

Quizplus · Accepted Answer

The loss of liquidity in the interbank lending market during the financial crisis made it difficult for the Fed to hit their target federal funds rate, as banks were hesitant to lend to each other. This resulted in a wider spread between the target rate and the effective rate. The other options may have also had an impact on the economy, but they were not the primary reason for the difficulty in hitting the target rate.

During the Financial Crisis of 2007-2009 It Became Difficult for the Fed