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Provides an in-depth overview of the Federal Reserve System, including information about monetary policy and the economy, the Federal Reserve in the international sphere, supervision and regulation, consumer and community affairs and services offered by Reserve Banks. Contains several appendixes, including a brief explanation of Federal Reserve regulations, a glossary of terms, and a list of additional publications.
During the recent financial crisis, the Fed implemented a series of extraordinary and unconventional policies to alleviate the impact of the crisis on financial markets and the economy. This paper examines the effects of these policies on broad financial market conditions. The Fed was more likely to initiate or expand new programs when financial market conditions were tighter than usual and economic conditions deteriorating. The Fed¿s policies improved broad financial market conditions significantly at announcement and that the improvements were associated primarily with program initiations and expansions. Charts and tables. This is a print on demand edition of an important, hard-to-find publication.
The Federal Reserve System, created in the early 20th century, is now more than a hundred years old. This book takes the reader through the founding and first century of Federal Reserve monetary policy, and uses the analysis of the past to address the present and future issues of central banking.With its focus on the actual policies, rather than the politics or individuals that determined those policies, this book addresses issues that have plagued monetarists since the onset of the Great Recession. Then, it proceeds to discuss the issues that will affect the efficacy of policy in the future. This section of the book is relevant for all central banks as central bank behavior post the onset of the Great Recession was similar throughout the world.The book presents an analysis of the path of inflation that puzzled the experts. It adds an analysis of central banking's ability or lack thereof to influence market interest rates. Lastly, it explains the current exploding crypto-currency craze, its potential to supplant traditional transactions media, and the future of these so-called currencies.
An insider's account of the workings of the Federal Reserve, thoroughly updated to encompass the Fed's action (and inaction) during the recent financial meltdown. Stephen Axilrod is the ultimate Federal Reserve insider. He worked at the Fed's Board of Governors for more than thirty years and after that in private markets and as a consultant on monetary policy. With Inside the Fed, he offers his unique perspective on the inner workings of the Federal Reserve System during the last fifty years. This new, post-financial meltdown edition offers his assessment of the Fed's action (and inaction) during the crisis and expanded coverage of the Fed in the Bernanke era. Great leadership in monetary policy, Axilrod says, is determined not by pure economic sophistication but by the ability to push through political and social barriers to achieve a paradigm shift in policy—and by the courage and bureaucratic moxie to pull it off.
The Federal Reserve (Fed) is tasked with maintaining price stability and achieving maximum employment. In practice, over the last decades the Fed has sought to achieve its objectives primarily through the manipulation of a short-term inter-bank interest rate, the federal funds rate (FFR).At the height of the Great Recession of 2007-2009, the Fed pushed its benchmark policy rate to zero. With its principal tool unavailable, the Fed resorted to a sequence of unconventional policy actions in attempt to provide further stimulus to the economy. These actions included large-scale asset purchases (more commonly referred to as quantitative easing, or QE) and forward guidance. These programs were viewed by most as solutions to the temporary problem of the zero lower bound (ZLB) on the short-term policy rate. Market participants never expected the ZLB to last more than a couple of years (Bauer and Rudebusch 2016; Wu and Xia 2016), but in actuality the FFR was at zero for seven years. And though the Fed began raising the FFR at the end of 2015, it has since cut it twice, and at present the FFR sits less than two hundred basis points above zero. Markets are expecting further rate cuts in the near future.A substantial body of research finds that the so-called natural rate of interest, or sometimes “r-star,” is on a continuing secular downward trend. While the Laubach and Williams (2003) estimate of r-star declined substantially in the wake of the Great Recession, this decline is part of a longer-run downward trend. In standard models, optimal policy entails adjusting the policy rate to track movements in the natural rate. With the natural rate hovering so close to zero, there is little room for conventional policy rate cuts should the need arise.All signs therefore point towards an extended period in which interest rates are significantly lower than their average levels from the 1980s to 2000s. This means that the problem of the ZLB and the inability to push the FFR down in response to deteriorating economic conditions is likely to arise again. As a consequence, the Fed must move away from its conventional operating framework - for example, by significantly raising its inflation target, experimenting with negative rates, or more regularly using unconventional tools like QE as a substitute for conventional rate cuts at the ZLB. Which of these options should the Fed and other central banks choose?

Conduct of Monetary Policy

United States. Congress. House. Committee on Banking and Financial Services. Subcommittee on Domestic and International Monetary Policy

Published: 1995

Total Pages: 100


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