202 posts on "Monetary Policy"
May 4, 2011
How Much Will the Second Round of Large‑Scale Asset Purchases Affect Inflation and Unemployment?
With the federal funds rate at the zero lower bound, the Fed’s large-scale purchase of Treasury securities provides an alternative tool to boost the economy. In November 2010, the Federal Open Market Committee (FOMC) announced a second round of large-scale asset purchases (LSAP2) with the goal of accelerating the recovery. In this post, we analyze the impact of LSAP2 on the two variables that fall under the Fed’s dual mandate: inflation and unemployment. Our point estimates suggest that the effects will be moderate and delayed, although there is considerable uncertainty attached to these estimates.
Posted at 10:00 am in Exchange Rates, Fed Funds, Inflation, Macroeconomics, Monetary Policy, Treasury, Unemployment | Permalink
April 13, 2011
Why Did U.S. Branches of Foreign Banks Borrow at the Discount Window during the Crisis?
To help contain the economic damage caused by the recent financial crisis, the Federal Reserve extended large amounts of liquidity to financial firms through traditional lending facilities such as the discount window as well as through newly designed facilities. Recently released Federal Reserve data on discount window borrowing show that some U.S. branches and agencies of foreign banks were among the most active users of the window. In this post, we explain why U.S. branches borrow at the discount window. We also discuss two main reasons why these branches had a large need for dollars during the crisis and how discount window loans to them helped stabilize the financial system and the real economy in the United States.
Posted at 10:00 am in Banks, Fed Funds, Financial Institutions, Monetary Policy | Permalink | Comments (2)
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