I’m pretty sure that the answer is ‘No’, at least for now. For background, the effective Fed Funds rate has been falling steadily for the last couple of months:
The interest rate increase delivered by the European Central Bank this week was exactly as expected. But Jean-Claude Trichet, president, left observers scratching their heads over other items on Thursday’s ECB governing council’s agenda.
First, were plans to deal with the problem of ”addicted banks” – those banks which have become dependent on ECB liquidity. Several council members (including Italy’s Mario Draghi) had spoken publicly about proposals to limit the use of ECB operations by individual banks. The assumption was that some kind of penalties would be imposed.
Mr Trichet noted on Thursday, however, that the problem had changed “in nature over time”.