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The Fed's Policy Implementation Framework
The minutes of the November 2018 meeting of the Federal Open Market Committee (FOMC or Fed) cover a lengthy discussion on possible changes to the policy tools and procedures the Fed uses to control money-market interest rates. The Fed appears to be moving toward the proposal that I made with Brian Sack in a 2014 PIIE Policy Brief. Our proposal would give the Fed firmer control of the most important short-term interest rates in the economy while saving taxpayers money and keeping the payments system safe and liquid. Our 2014 proposal had four main components: How has Fed policy evolved, and how is it likely to evolve ... (full story)
