It seems that the business media is unfamiliar with the concept. I didn't find any news article on the Fed's rate cut that noted the jump in long-term interest rates that immediately followed the announcement of the cut. As noted in my prior post, if further cuts in the federal funds rate lead to higher 10-year treasury rates then they might actually slow the economy, since long-term rates have far more impact than short-term rates. The question is whether the Fed's goal is to stimulate the economy or help out the banks. The media should be following this issue. [addendum: I stand corrected -- MarketWatch got the story right: http://www.marketwatch.com/news/story/mortgage-rates-could-rise-not/story.aspx?guid=%7b3EAD37E9-CBCB-4EE1-934A-5776C2834EBB%7d&print=true&dist=printTop
--Dean Baker
