The federal funds rate could become useless as a policy tool thanks to plans to increase banks' reserves, according to testimony from Federal Reserve Board chairman Ben Bernanke scheduled for today.
Bernanke did not appear before the House Committee on Financial Services as planned, due to heavy snow in the Washington, DC area, but his pre-released written testimony stated "the level of activity and liquidity in the federal funds market has declined considerably, raising the possibility that the
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