Teaching the New Tools of Monetary Policy
Resources for teaching the Fed's monetary policy tools in an ample-reserves framework.
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Reading Q&A
16-30 min
How Does the Fed Use Its Monetary Policy Tools to Influence the Economy?
OVERVIEW
This reading assignment explains how the FOMC conducts monetary policy by setting the target range for the federal funds rate and how the Fed uses its policy tools to steer the federal funds rate into the FOMC’s target range. These tools and strategies help the Fed maintain the congressional mandate of maximum employment and price stability. Print the article.
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