“Because they are sitting on $2 trillion of excess reserves, banks rarely borrow money overnight. They do not have to. They have plenty of reserves.  Before late 2008, a bank would borrow overnight if its reserves threatened to fall below the legal requirement set by the FED. But now banks have so many reserves that they rarely borrow. So, there is little demand. So, the rate is low. The FOMC has increased the monetary base at times. In most of 2012, it decreased it. The FedFunds rate has not changed when FOMC policy has changed. Here is the inescapable conclusion: the Federal Reserve does not control this rate. The FED pretends that it does.”

http://teapartyeconomist.com/2013/09/19/fed-does-not-control-federal-funds-rate/

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