The roaring dot-com era of the late nineties created all kinds of headaches for the Federal Reserve. While its leader, the “maestro” Alan Greenspan, was referring specifically to confusion over money supply definitions when he uttered “irrational exuberance” in late ’96, a few months later the fruits of that exuberance were causing headaches down in the trenches of his Open Market Desk. On an otherwise nondescript day in April ’97, it seemed as if the central bank was losing control of its key monetary policy lever in federal funds.
More than that, the problem turned out to be the US Treasury.
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