Journal Article

Mitigating COVID-19 Effects with Conventional Monetary Policy


Abstract: The Federal Reserve slashed the federal funds rate in response to the effects of the COVID-19 pandemic. The full impact of the pandemic on the economy is still uncertain and depends on many factors. Analysis suggests that allowing the federal funds rate to fall fast will help the economy cope with the aftermath of COVID-19. In particular, the limited policy space due to the effective lower bound of the federal funds rate before the pandemic reinforces rather than offsets the need for a rapid funds rate decline.

Keywords: COVID-19; federal funds rate; monetary policy; effective lower bound;

Access Documents

File(s): File format is application/pdf https://www.frbsf.org/economic-research/files/el2020-09.pdf
Description: Full text - article PDF

Authors

Bibliographic Information

Provider: Federal Reserve Bank of San Francisco

Part of Series: FRBSF Economic Letter

Volume: 2020

Issue: 09

Pages: 05

Related Works