Journal Article

Policymakers Have Options for Additional Accommodation: Forward Guidance and Yield Curve Control

Abstract: With the federal funds rate near zero, policymakers are evaluating options for providing additional monetary policy accommodation, including a tool known as yield curve control. We find that despite low nominal Treasury yields, some scope for additional accommodation remains should policymakers deem it appropriate. However, we argue that forward guidance about future interest rates could deliver much, though not all, of the accommodation of yield curve control.

Keywords: Federal Open Market Committee; Federal funds rate; Yield curve control; Monetary policy accommodation; Interest rates;

JEL Classification: E4; E52;

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Bibliographic Information

Provider: Federal Reserve Bank of Kansas City

Part of Series: Economic Bulletin

Publication Date: 2020-07-15

Pages: 5