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…
In our recent American Banker opinion piece, Heritage's Norbert Michel and I argue that, if the Fed is really serious about shrinking its balance sheet, it had better quit paying interest on banks' excess reserves (IOER) as well. How come? Because the current, relatively high IOER rate …
If you're a regular Alt-M reader (and may the frost never afflict your spuds if you are), I needn't tell you that I'm the last person to exalt the pre-2008 Federal Reserve System. Among other things, I blame that system for fueling the 2003-2006 boom, and for…
I chose my title carefully. I will focus on what is possible for the U.S. central bank to achieve rather than what they might want to accomplish or may attempt to effect. I examine three possible senses in which the Federal Reserve could not raise interest rates,…
In previous installments of this primer I've tried to convince you, first, that monetary policy is ultimately about keeping the available quantity of money from differing substantially, if only temporarily, from the quantity demanded and, second, that doing this boils down in practice to having a money…