Commentary: Fed might no longer have control of the fed-funds rate

Benn Steil and Paul Swartz, director of international economics and an analyst, respectively, at the Council on Foreign Relations, explain how the Federal Reserve has sustained "extraordinary lending and monetary policies," as Chairman Ben Bernanke put it, by reinvesting proceeds from its mortgage-bond portfolio. Eventually, the Fed must exit from such stimulus, with the strategy involving a transformation, Steil and Swartz write. The plan also implies that the central bank will not be able to control any interest rate, including the federal-funds rate.

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