Susan Kizer Economic Education Coordinator The opinions expressed are solely those of the presenters...
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Transcript of Susan Kizer Economic Education Coordinator The opinions expressed are solely those of the presenters...
MONETARY POLICY AND
THE FEDERAL RESERVE
Susan Kizer
Economic Education Coordinator
The opinions expressed are solely those of the presenters and do not reflect the opinions of the Federal Reserve System.
MONETARY POLICY
The actions of a central bank that influence the availability and cost of money and credit to achieve national economic goals.
MONETARY VS. FISCAL POLICY
Monetary Policy• Conducted
by the Fed• Availability
and cost of money and credit
Fiscal Policy• Congress
and President
• Tax policy and spending decisions
CURRENT BOARD OF GOVERNORS
Janet YellenChairwoman
Daniel K. Tarullo
Stanley Fisher
Jerome H. Powell
Lael Brainard
FOMC MEETINGS Eight regularly scheduled meetings Two types of information:
Statistical information (economic indicators)Anecdotal information (Beige Book)
Is the country’s economy currently meeting the goals set by Congress for the Federal Reserve?
Maximum employmentStable PricesModerate long-term interest rates
THE BEIGE BOOK Anecdotal information from every
Federal Reserve District Gathered through
Reports from Board of Directors Interviews with key business contacts,
economists and market expertsOther sources
FOMC’S PUBLIC STATEMENT Released immediately following every
meeting (2:15 p.m. Eastern) Contains the committee’s
Target for the federal funds rateSummary of economic conditionsAssessment of the balance of risks between
price stability and sustainable economic growth
TOOLS OF MONETARY POLICY
Open Market Operations
Discount Rate
Reserve Requirement
s
Interest on Reserve Balances
INTEREST RATES Today the Federal Open Market
Committee reaffirmed the current 0 to ¼ percent target range for the federal funds rate.
LABOR – FULL EMPLOYMENT
Since the Committee last met in April, the pace of job gains has picked up and labor market conditions have improved somewhat further.
INFLATION- STABLE PRICES
Inflation has continued to run below our longer-run objective, but some of the downward pressure on inflation resulting from earlier sharp declines in energy prices is abating.