The Fed is not as powerful as you think

It's been almost 9 years since I wrote this post at Angry Bear. I'll admit that the idea isn't original. I got it from Elliott Wave International. But my own look at the data confirmed it. The Fed does not control short-term interest rates. The Fed sets the Federal Funds Rate, but this is a close follower of 3 month T-Bill rates, which are set by an open market auction. The FFR always lags 3-mo T-Bills, and never leads. The lag can be very short, or as much as 4 months at major turning points.

Now I see another Elliott Waver making this same point, and providing these graphs.