In a new Economic Letter, the Federal Reserve Bank of San Francisco assessed current credit conditions and attempted to gauge the impact that monetary policy has had on credit rates. Concludes the Bank:
The indicators of aggregate credit conditions outlined in this article suggest that the Fed’s accommodative monetary policy stance during the financial crisis has worked to improve credit markets. The historical federal funds rate indicator declined from 3.1% in June 2007 to 1.7% by June 2009. At the same time though, these results also suggest that overall credit conditions since late 2007 have been tighter than might otherwise have been expected based on historical experience and that this tightness is partly offsetting the Fed’s policy actions.