Thew Fed has been lowering and raising rates

Look at the red line, the one year treasury rate. It shot up while the Fed was desperately buy short term debt, trying to keep it down. Look at the change in  its balance sheet.   The one year rates collapsed over the China thing, but we can see a four fold variation in  that rate. Then, the effective rate, the blue, it has been trying to raise that for a year  with the reverse repurchase thing.

The Fed is in a maze and clueless.  The effective rate is determined by GSEs who have grown enormously since 2001.  They get low deposit rates by regulation. But they are a profit center for Treasury which own Fanny and Freddy since they went bankrupt.  And the Fed owns GSE assets, but net goes to treasury.  Member banks take deposits from GSEs, so right away we have three loops entertwined.  None of the MIT Basket Weaving math will work, we are going to get a repeating sequence, multiple equilibria Farmer calls it.