The staff provided a briefing that summarized its analysis of the extent to which some of the Committee's monetary policy tools could provide adequate policy accommodation if, in future economic downturns, the policy rate were again to become constrained by the effective lower bound (ELB).5 The staff examined simulations from the staff's FRB/US model and various other economic models to assess the likelihood of the policy rate returning to the ELB and to evaluate how much additional policy accommodation could be delivered by the current toolkit. This toolkit included threshold-based forward-guidance policies, in ... (full story)

Federal Reserve officials see ongoing global trade tensions as the biggest threat to otherwise strong U.S. economic growth, according to an account of the central bank's most recent meeting. Minutes from the July 31-Aug. 1 Federal Open Market Committee gathering indicated that members remain fairly confident that the "strong" economic growth of late will continue at least over the near term. Officials said it would "likely soon be appropriate to take another step in removing policy accommodation," an indicator for a looming rate hike that is widely expected by markets. However, they indicated that tariffs, imposed on ... (full story)