Here’s Everything About the Fed’s Monetary Policy &Tools

1. Policy Framework & Strategic Mandate

The Federal Reserve (via FOMC) operates under a statutory dual mandatemaximum employment and price stability (2% inflation target), with an implicit lender-of-last-resort role (聯邦儲備系統). Since the 2008 crisis, its monetary tools have evolved significantly to navigate an ample-reserves environment.

In May 2024, the Fed’s website updated a comprehensive list of active policy tools:

  • Open Market Operations (OMOs)
  • Interest on Reserve Balances (IORB)
  • Overnight Reverse Repurchase (ON RRP) facility
  • Discount Window & Discount Rate
  • Reserve Requirements
  • Term Deposit Facility
  • Central Bank Liquidity Swap Lines
  • FIMA Repo Facility
  • Standing Repo Facility

A strategic review launched in late 2024 (concluding in early 2025) reaffirmed the Fed’s inflation goal while inviting communications and toolkit readiness enhancements.

2. Fed’s Rate Tools

Interest on Reserve Balances (IORB)

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *