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12 posts on "FOMC"December 18, 2020How Did Market Perceptions of the FOMC’s Reaction Function Change after the Fed’s Framework Review?
Survey data reveal a notable shift in market participants’ perceptions of the FOMC’s policy rate “reaction function” in the direction of higher expected inflation and lower expected unemployment ahead of the next rate “liftoff.”
Posted at 7:00 am in Expectations, FOMC, Inflation, Labor Market, Monetary Policy | Permalink | Comments (0)August 20, 2020Market Function Purchases by the Federal Reserve
This post describes efforts taken by the Federal Reserve to support and sustain the Treasury and MBS markets following the COVID-19 outbreak as well as prior “market functioning” interventions in 1939, 1958, and 1970.
April 15, 2020The COVID-19 Pandemic and the Fed’s Response
In this post, the authors review the Fed’s action following the coronavirus outbreak, and compare it with the response to the 2007-09 financial crisis.
Posted at 4:11 pm in Crisis, Federal Reserve, FOMC, Great Recession, Monetary Policy, Pandemic | Permalink | Comments (0)April 6, 2020How the Fed Managed the Treasury Yield Curve in the 1940s
The coronavirus pandemic has prompted the Federal Reserve to pledge to purchase Treasury securities and agency mortgage-backed securities in the amount needed to support the smooth market functioning and effective transmission of monetary policy to the economy. But some market participants have questioned whether something more might not be required, including possibly some form of direct yield curve control. In the first half of the 1940s the Federal Open Market Committee (FOMC) sought to manage the level and shape of the Treasury yield curve. In this post, we examine what can be learned from the FOMC’s efforts of seventy-five years ago.
Posted at 7:00 am in Economic History, Fed Funds, Federal Reserve, Financial Markets, Fiscal Policy, FOMC, Pandemic, Treasury | Permalink | Comments (0)May 8, 2019Ten Years Later—Did QE Work?
By November 2008, the Global Financial Crisis, which originated in the residential housing market and the shadow banking system, had begun to turn into a major recession, spurring the Federal Open Market Committee (FOMC) to initiate what we now refer to as quantitative easing (QE). In this blog post, we draw upon the empirical findings of post-crisis academic research–including our own work–to shed light on the question: Did QE work?
Posted at 7:00 am in Banks, Central Bank, Employment, Financial Markets, FOMC, Monetary Policy | Permalink | Comments (7)November 26, 2018The Pre-FOMC Announcement Drift: More Recent Evidence
We had previously documented large excess returns on equities ahead of scheduled announcements of the Federal Open Market Committee (FOMC)—the Federal Reserve’s monetary policy-making body—between 1994 and 2011. This post updates our original analysis with more recent data. We find evidence of continued large excess returns during FOMC meetings, but only for those featuring a press conference by the Chair of the FOMC
September 22, 2017Just Released: A Monthly Underlying Inflation Gauge
Today marks the launch of the monthly publication of the Underlying Inflation Gauge (UIG). We are reporting two UIG measures, described recently on Liberty Street Economics, that are constructed to provide an estimate of the trend, or persistent, component of inflation. One measure is derived using a large number of disaggregated price series in the consumer price index (CPI), while the second measure incorporates additional information from macroeconomic and financial variables.
September 9, 2013Preparing for Takeoff? Professional Forecasters and the June 2013 FOMC Meeting
Following the June 18-19 Federal Open Market
Committee (FOMC) meeting different measures of short-term interest rates
increased notably.January 7, 2013Making a Statement: How Did Professional Forecasters React to the August 2011 FOMC Statement?
The Federal Open Market Committee (FOMC) statement released on August 9, 2011, was the first to incorporate language on “forward guidance” with an explicit date tied to the Committee’s expected path of monetary policy.
November 2, 2012Historical Echoes: FOMC … “Minutes” by Minutes
Kathleen McKiernan Although the Federal Reserve was founded in 1913, the Federal Open Market Committee, or FOMC, wasn’t created until passage of the Banking Act of 1933. Congress established the name and legal structure of the FOMC as a formal committee of the twelve Reserve Banks. In 1935, a System reorganization added the seven-member Board […]
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