Fed Liftoff and Subprime Loan Interest Rates: Evidence from the Peer-to-Peer Lending Market

On December 16th of 2015, the Fed initiated “liftoff,” raising the federal funds rate range by 25 basis points and ending a 7-year regime of near-zero rates. The authors use a unique dataset of 640,000 loan-hour observations to measure the impact of liftoff on interest rates in the peer-to-peer lending segment of the subprime market.
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