Bernanke said what!?

Ben says:

After lowering short-term interest rates nearly to zero in December 2008, the Fed sought to ease policy further by buying large amounts of longer-term securities (quantitative easing).

Here is a link to the graph. In it you will see the one year bond rate, treasuries held by the Fed, the effective rate and the target, all the way through 2008. And you will see the one year bond dropping first, The Fed selling Treasuries, the effective rate following the one year bond, and the Fed setting the target rate last.

The Yellow line is the one year bond, leading up until mid year.  Then the next quarter it again leads the drop in rates.  That is a market activity. Then the effective rate follows. The Fed target rate, Green,  is always the last to be set. Notice there is very little overlap between the effective rate and target.

This link has the actually Fed graph, which will not plot. The Fed is evidently locking out a bunch of plotting.


Fed Graph

These are the Treasuries held, going down as they are being sold.  The Blue is all Treasuries, the red are the short term notes, all being dumped. How does selling Treasuries lower the interest rate? It does not, when the Fed sells, prices drop and rates rise. The Fed was trying to stop the slide in rates all the way through 2008, and was failing to do so.