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Gauging the Fed’s Current Tightening Actions: A Historical Perspective
At the conclusion of their July 26, 2023, meeting, the Federal Open Market Committee (FOMC) voted to raise the target range of the federal funds rate by 25 basis points to 5.25% to 5.50%. This blog post will examine the magnitude of the FOMC’s current actions relative to those since 1983 and, importantly, whether monetary policy has moved into restrictive territory. The current tightening episode is the seventh in the past 40 years; a tightening action is defined as a series of increases in the federal funds target rate (FFTR). In the aftermath of the financial crisis and recession from late 2007 to mid-2009, the ... (full story)