[squiffy]

Yes, but the fed was lowering short term rates substantially due to recession, economic slow down, and fears of possible deflation.

I thought the Fed does this by open market operations, buying and selling treasury bonds and the interbank lending rate.

So didn't the Fed increase the money supply, easing short term credit rates, which produced the housing boom and car selling boom, and triggered lending and economic growth?

The Fed did increase the money supply.