One of my economics professors at University of Virginia espoused the point of view that the Fed was powerless to affect interest rates. My recollection was that the main reason was that he thought their main tool for impacting the Federal Funds rate was through their involvement in the repo market, and that they are only a small fraction of that market. I’ve run into this guy more recently and asked him if he has changed his mind, considering all of the permanent open market operations, and low interest rates post 2008. His response was something like, well take last week for example, they bought a bunch of treasuries and the rates went up. I mentioned the difference between nominal and real interest rates, and he deflected by saying that there was no way that I could prove that the real rate had gone down. This prof is pretty knowledgable about real world stuff (made about $30 million on Wall Street). How could you convince such a person (if you wanted to waste your time) that the Fed is actually able to influence (real?) interest rates?