Monetary Policy 101: A Primer on the Fed's Changing Approach to Policy Implementation
The Federal Reserve conducts monetary policy in order to achieve its statutory mandate of maximum employment, stable prices, and moderate long-term interest rates as prescribed by the Congress and laid out in the Federal Reserve Act. For many years prior to the financial crisis, the FOMC set a target for the federal funds rate and achieved that target through purchases and sales of securities in the open market. In the aftermath of the financial crisis, with a superabundant level of reserve balances in the banking system having been created as a result of the Federal Reserve's large scale ...
The effect of multilateral trade clearinghouses on the demand for international reserves
This paper attempts to capture the portfolio incentives for central bank participation in a multilateral trade clearinghouse and to discuss the relation of those incentives to the volume of trade. Clearinghouses for the netting of multilateral intra-regional trade have existed since the 1950s, but no work to date has attempted to explore the incentive effects of such arrangements. Instead previous work, primarily empirical, has focused on the tendency of preferential arrangements (clearing as well as favorable protectionist policies) between nations to encourage trade flows between them. This ...
U.S. international transactions in 1988
The Effects of FOMC Communications before Policy Tightening in 1994 and 2004
The ways in which the Federal Open Market Committee (FOMC or "Committee") communicates its views on economic and financial conditions, the economic outlook, and its policy intentions have evolved over time.
The Phillips curve and US monetary policy: what the FOMC transcripts tell us
The Phillips curve framework, which includes the output gap and natural rate hypothesis, plays a central role in the canonical macroeconomic model used in analyses of monetary policy. It is now well understood that real-time data must be used to evaluate historical monetary policy. We believe that it is equally important that macroeconomic models used to evaluate historical monetary policy reflect the framework that policymakers used to formulate that policy. To that end, we use the Federal Open Market Committee (FOMC) transcripts to examine the role that the Phillips curve framework played ...
The FOMC Meeting Minutes: An Update of Counting Words
An earlier Feds note provided information about the structure of the FOMC meeting minutes and the use of "quantitative" or "counting" words to characterize the number of policymakers aligned with particular views. This note extends that analysis through 2016.
What Happened in Money Markets after the Fed's December Rate Increase?
At its December 2015 meeting, the Fed's policymaking committee, the Federal Open Market Committee (FOMC), announced an increase in the target range for the federal funds rate of 25 basis points, the first increase in the policy rate since June 2006.
Changes in Women's Representation in Economics: New Data from the AEA Papers and Proceedings
The shortage of women and historically underrepresented racial and ethnic groups in the economics profession has received considerable public attention in the past several years. The American Economic Association (AEA), the professional organization for economists, has been taking steps to address criticism that the economics discipline is unwelcoming to women and underrepresented minorities.
Hanging on Every Word : Semantic Analysis of the FOMC's Postmeeting Statement
The Federal Open Market Committee's (FOMC or "Committee") postmeeting statements constitute one of the key vehicles through which the Committee communicates its assessment of the economy, its policy actions, and its thinking about future policy.
German monetary targeting: a retrospective view