Search

THIS PRESENTATION summarizes the framework for thinking about Federal Reserve asset acquisition that Al Broaddus and I orginally laid out in the Federal Reserve Bank of Richmond 2000 Annual Report. 1 That essay had two objectives. First, we provided a context for thinking about the broad asset acquisition policy of the Federal Reserve. Second, we proposed that the Fed and the Treasury cooperate to ensure that the Fed could continue to acquire and hold Treasury securities even if the Treasury had no other reason to issue debt. This summary begins in section 1 by distinguishing between monetary and credit policy. Building on that distinction, section 2 presents our guiding principles for Fed asset acquisition: respect for the integrety of fiscal policy and support for Fed independence. Section 3 contains our proposal for the Fed to follow a Treasuries-only policy with the cooperation of the Treasury. Section 4 evaluates our proposal from the perspective of the fiscal authorities. Our argument is restated briefly in the conclusion.

n this paper, I discuss transparency in the con-duct of monetary policy from three perspectives.First, I look at why central banks have chosento become more transparent in recent years. I thenset out the measures taken by the Bank of Canadato increase transparency. The third section of thepaper examines a number of issues that could begrouped under the heading “Are there limits towhat should be made public?”

The purpose of this paper is to describe recent financial innovation in the United States, outline its principal implications with regard to (1) the structure and behavior of financial markets and (2) the conduct of monetary policy, and speculate on the likely character of further innovation in the near-term future. In the United States as elsewhere, financial innovation has been a continuous but uneven process, where the rate of innovation has varied substantially from one period to the next depending on a variety of circumstances.

This study presents the results of a comprehensive regression analysis of the determinants of tax-exempt municipal bond yields.

This article discusses a technical aspect of the Federal Reserve’s monetary targeting procedure that has come to be known as “base drift.” The Fed has been announcing target ranges for the growth of M1 and other monetary aggregates since 1975. These ranges have been expressed in terms of rates of growth from a base quarter to the quarter four quarters later. The term “base drift,” refers to the Fed’s practice of using the actual dollar level of an aggregate in the base quarter as the base level for the target range, rather than the midpoint of the targeted range set in the preceding targeting period.

This paper presents a general theoretical model of individual bank balance sheet management under conditions of uncertainty.

For the last three years, the Federal Open Market Committee has focused greater attention on certain monetary and credit aggregates in specifying its longer-run targets.