When I published Floored! last October, I thought I'd said all I could say concerning the adverse consequences of the Fed's then decade-old decision to adopt a "floor"-type operating system. In the new arrangement, the Fed pays interest on bank reserves, and uses changes in the rate…
As regular Alt-M readers know, I've been saying for over a year now that, despite their promise to "normalize" monetary policy, Fed officials have been determined to maintain the Fed's post-crisis "floor" system of monetary control, in which changes to the Fed's monetary policy stance are mainly…
Last month, in what will presumably be one of his last public speeches before he retires this June, New York Fed President William Dudley defended the Fed's current "floor" system of monetary control against the alternative of a corridor arrangement. Because Dudley's is one of the more…
If you've spent much time at all on these pages, you know that my favorite hobby-horse for several years now has been the Federal Reserve's policy of paying interest on (banks') excess reserves (IOER) at an above-market rate. By adopting that policy in October 2008, the Fed…