> To do this they just set the deposit rate under the "floor" to encourage banks to lend above that, but they didn't set a ceiling, assuming it would magically

> To do this they just set the deposit rate under the "floor" to encourage banks to lend above that, but they didn't set a ceiling, assuming it would magically stay in target range? Yes. The Fed had hoped that IOER would serve as a floor for controlling interest rates, when it ended up acting as a ceiling. They used repo transactions to try and counter this. Prior to ~2007, the Fed used open market operations to maintain a corridor system.