After extensive deliberations and thorough review of experience to date, the Committee judges that it is appropriate at this time to provide additional informa| Board of Governors of the Federal Reserve System
This post uses the New York Fed DSGE model to simulate how interest rates, output, and inflation would have performed had the Fed followed an average inflation targeting (AIT)-type reaction function since the second quarter of 2021, when inflation began to rise—instead of keeping the federal funds rate at the zero lower bound until March 2022, and then raising it aggressively thereafter. The authors show that actual policy was more accommodative in 2021 than implied by the AIT reaction func...| Liberty Street Economics
Although inflation has fallen recently, it remains above target, and the economy continues to expand at a robust pace. Does this resilience imply that monetary policy has been ineffectual? Or does it mean that we haven’t yet observed the full effect of the monetary tightening that has already taken place? This post uses a Bayesian vector autoregressive model to study the behavior of the U.S. economy over the last few years.| Liberty Street Economics
A look at how the Federal Reserve can keep its supply of ample reserves by estimating the slope of the reserve demand curve.| Liberty Street Economics
Consistent with the Principles for Reducing the Size of the Federal Reserve's Balance Sheet that were issued in January 2022, all Committee participants agreed| Board of Governors of the Federal Reserve System