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Kansas City Fed Symposium: “Macroeconomic Challenges: The Decade Ahead”

Bernanke: Preconditions In Place for Growth in 2011; Policy Remains "Very Accomodative"

When Will the Fed Hike Rates?

Should the Fed Move to a Higher Inflation Target?

How Will the Fed Exit Loose Monetary Policy?

Debates Surrounding the Fed's Monetary Policy Rule

Forthcoming Changes in the Composition of the FOMC

Fed Balance Sheet: Security Holdings to Be Maintained Constant

Exiting the Accommodative Policy Stance: Past and Future Rollbacks

Fed Balance Sheet Composition: Need for Quality Control?

Paying Interest on Reserves: The Ace in the Fed's Exit Strategy?

Senate Confirms Bernanke's Reappointment as Federal Reserve Chairman

Has the Fed Had Any Effect on Credit Growth?

Does the U.S. Dollar's Reserve Currency Role Constrain the Fed?

U.S. Bailout Logic (or Lack Thereof): Why the Fed Rescued Bear Stearns et al. But Not Lehman

Background:

The Fed has significantly broadened its policy making repertoire during the financial crisis and ensuing economic recession. After slashing the policy rates to nearly zero, the Fed turned to more unconventional policy measures such as directly purchasing asset-backed securities and Treasury bonds with the aim of lowering long-term interest rates. The Fed's balance sheet has expanded in size and deteriorated in quality, raising concerns about the difficulty of rolling back the Fed's monetary easing. On the other hand, despite the sharp rise in excess reserves in the banking system and lower market interest rates, private-sector credit growth remains stagnant. The Fed will remain cautious with regards to embarking on policy tightening, as the risk could be a reprisal of 1937, when premature fiscal and monetary tightening pushed the U.S. back into a recession during the Great Depression.

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Associated Readings

Analysis Federal Reserve Board Jun 25, 2009 Federal Reserve announces extensions of and modifications to a number of its liquidity programs Analysis Federal Reserve Board July 2009 Federal Reserve Credit and Liquidity Programs and the Balance Sheet - Report Opinions Federal Reserve Bank of Dallas Danielle DiMartino, John V. Duca and Jessica J. Renier Apr 02, 2009 Fed Confronts Financial Crisis by Expanding Its Role as Lender of Last Resort Analysis Securities Industry and Financial Markets Association 2009 Summary of the various US federal facilities Analysis Federal Reserve Board Feb 24, 2009 Fed's New Info Website: Credit and Liquidity Programs and the Balance Sheet Analysis Morgan Stanley Richard Berner and David Greenlaw Mar 11, 2009 United States: Policy Uncertainty Fogs the Outlook Analysis Moody's (free registration required) Nov 24, 2008 Money Market Investor Funding Facility and Other Federal Measures Promote Liquidity in Short-term Markets Analysis BNP Paribas Nov 06, 2008 US: Alternative Monetary Policy and Quantitative Easing | ECB: Carry on Cutting Analysis TD Bank Financial Group Craig Alexander Oct 17, 2008 Origins and Policy Response to the Credit Crunch in North America Research Federal Reserve Board David H. Small and James A. Clouse July 2004 The Scope of Monetary Policy Actions Authorized under the Federal Reserve Act