In some previous posts, I've taken Federal Reserve officials, including former New York Fed President William Dudley, to task for continuing to insist that the Fed's post-2008 "floor" operating system is a "simple" means for keeping overnight interest rates on target. Whatever the floor system's merits may…
As we start off the New Year, we thought it might not be a bad idea to remind our readers of the need to resist status-quo bias in assessing both the Fed's performance and the merit of alternative institutional arrangements. -Ed. *** Although the movement to “End…
On November 12th I wrote a longish post explaining how growth fluctuations in two of the Federal Reserve's less-familiar liabilities—the foreign repo pool (FRP) and the Treasury General Account (TGA)—had contributed to a shortage of bank reserves that in turn caused repo rates to spike. I followed…
Back in the spring of 2018, yours truly responded at length to a speech then New York Fed President Bill Dudley gave, defending the Fed's "floor" system of monetary control. In that speech, Dudley claimed that "the case for retaining the current floor system is very compelling."…
In a post published here in mid-November, I traced the Fed's repo-market troubles to post-2008 changes in the importance and volatility of two of the Fed's non-reserve liabilities: TGA balances and the foreign repo pool. Then, in a companion piece, I made some suggestions for reining-in those…