Economics
Fed Rate Veering Closer to Zero Adds Fuel to Debate Over Tweaks
- Key Fed benchmark fell to 0.05%, lowest level since April
- Demand for central bank’s reverse repo facility fell Tuesday
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The key benchmark that the Federal Reserve targets to control monetary policy slipped closer to zero, raising the possibility that the central bank might need to tinker with the tools it uses to control it.
The shift also adds to the debate about policy more broadly, as the glut of cash that’s keeping downward pressure on short-end rates combines with longer-term inflation concerns to fuel talk about just how soon the Fed might need to take its foot off the accelerator.