The Fed does not literally set the federal funds rate; it injects or extracts bank reserves (changes the money supply) so that the actual overnight interbank rate is brought into line with the FOMC's target.
definitionpending
Speaker
John TaylorEvidence Quote
“effectively they set a target and the idea is that the the Fed and New York trading desks adjust the reserves or the money supply to bring the actual interest rate into line with their goal”
Created: 6/15/2026, 9:20:12 AM
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