From late 2002 into 2006 the Fed raised rates by as much as 430 basis points as the economy recovered.

The measure is the total increase in the Fed's federal funds target from its low in the 2002–2004 period to its peak by 2006. True: the increase is about 430 basis points (within about 10bp, e.g., 425bp counts), and the hikes fall within late 2002 to 2006. Mostly true: the size is about right, but the timing is misdescribed. For example, the rate was still being cut in late 2002–2003, and hikes began only in mid-2004. Mixed: the size is off by 50–150bp. Mostly false: the Fed did raise rates in this period, but by far less (or far more) than stated. False: the Fed did not raise rates in this period.

Set before the research began.

1. E1 FRBSF Economic Letter; Monetary Policy Inertia and Recent Fed Actions Federal Reserve Bank of San Francisco · 26 January 2007

   “from 1% in June 2004 to 51⁄4% in June 2006. This gradual increase was accomplished via a sequence of 17 consecutive 25-basispoint increases at successive FOMC meetings.”

2. E2 Table Data - Federal Funds Effective Rate Federal Reserve Bank of St. Louis (FRED), citing Board of Governors of the Federal Reserve System

   “| 2002-10-01 | 1.75 | | 2002-11-01 | 1.34 | | 2002-12-01 | 1.24 |”

3. E3 Table Data - Federal Funds Effective Rate Federal Reserve Bank of St. Louis (FRED), citing Board of Governors of the Federal Reserve System

   “| 2004-05-01 | 1.00 | | 2004-06-01 | 1.03 | | 2004-07-01 | 1.26 |”

4. E4 Table Data - Federal Funds Effective Rate Federal Reserve Bank of St. Louis (FRED), citing Board of Governors of the Federal Reserve System

   “| 2006-06-01 | 4.99 | | 2006-07-01 | 5.24 | | 2006-08-01 | 5.25 |”

E1 reports the federal funds target rose from 1% in June 2004 to 5.25% in June 2006 through 17 consecutive 25bp increases, a total of 425bp, within the criteria's tolerance of the claimed 430bp. However, E2 shows the effective rate falling in late 2002, and E1 and E3 show the hikes starting from about 1% in mid-2004, so they began in mid-2004 rather than late 2002. E4 is consistent with the peak near 5.25% in mid-2006. The size is accurate but the timing is misdescribed, which the criteria classify as mostly true.