The federal funds futures rate naturally embodies the market's expectation of the average behavior of the federal funds rate. But, as John C. Robertson and Daniel L. Thornton explain, analysts cannot attempt to identify Fed policy from the behavior of the federal funds futures rate without...

This analysis examines how expectations of market participants about future Federal Open Market Committee policy actions have changed over the period since 1989, during which the FOMC made a sequence of changes to improve the transparency of monetary policy.

Central bankers in the United States and abroad must grapple with a broad array of questions about how best to conduct monetary policy. How much should the goal of price stability be emphasized relative to the goal of employment stability? Does central bank independence aid in achieving either...