Now that the Fed has started to bump up the federal funds rate, the explanation often heard for it is that the Fed is “tightening” monetary policy to keep economic growth in check. But sometimes the Fed needs to move rates just to keep policy from changing.

There has been a remarkable increase in the FOMC’s communication over the last decade. Perhaps the most dramatic change was the inclusion of language indicating the possible direction of future policy. One example is the now famous “considerable-period” language that was inserted in August...

An argument that the Federal Reserve System's current approach to seasonal cycles--pegging the nominal interest rate--could successfully be applied to the business cycle as well.

An argument against using short-term monetary policy to alleviate regional economic shocks and an analysis of how regional economic diversity lends strength to the goal of price stability as the Federal Reserve System's sole monetary policy focus.

A discussion of the February 1989 Humphrey-Hawkins testimony by Federal Reserve Chairman Greenspan, with suggestions for using the process to better communicate the monetary policy objectives of the Federal Reserve.

A review of the Federal Reserve System's July 1988 Monetary Policy Report to Congress, indicating a decline in the role of monetary aggregates in the policy process and including the Federal Open Market Committee's projection of economic conditions.

Federal Reserve policymakers have expressed their support for ultimately shrinking the Fed’s balance sheet and returning the composition of its portfolio to only Treasury securities. Policymakers also favor returning to a fed-funds-rate-targeting procedure or something quite similar. While Fed...

A summation of the forecasts of 27 economists made at the January 26, 1990 meeting of the Fourth District Economists' Roundtable, with major emphasis on the inflation outlook, GNP growth, and capital spending.

Careful readers of FOMC communications will note that in addition to talking about actual inflation, the committee often talks about inflation expectations. Sandra Pianalto, the president and chief executive officer of the Federal Reserve Bank of Cleveland, explains the important role that...

The world has seen a dramatic decline in inflation rates in recent decades, but concerns about inflation may still be warranted, especially in some countries. Evidence is mounting that inflation is harmful to economic activity even at fairly modest rates of inflation because of the way it...