Why the fed had to adopt corridor framework

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Reference no: EM134046412

Question

Explain (a) why the Fed had to adopt a corridor framework and set the three different target interest rates after Quantitative Easing (QE) programs.

Also, (b) explain why the Fed funds rate target is allowed to fluctuate only within the band (the ceiling rate and the floor rate).

Reference no: EM134046412

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