Federal Funds Rates Based on 7 Simple Rules is a part of the Simple Monetary Policy Rules indicator of the Federal Reserve Bank of Cleveland.

The Federal Reserve implements its monetary policy by using open market operations in United States government securities to target the federal funds rate. A substantial decline in the stock of United States Treasury debt could interfere with the conduct of monetary policy, possibly forcing the Fed to rely more heavily on discount window lending or to conduct open market transactions in other types of securities. Either choice would cause the implementation of monetary policy to resemble the methods used by the Fed before World War II. This paper describes two things: (1) how the Fed implemented monetary policy before the war and (2) the conflicts that arose within the Fed over the allocation of private-sector credit when discount window loans and Fed purchases of private securities were a substantial component of Federal Reserve credit. Those conflicts help explain the Fed's failure to respond vigorously to the Great Depression. The experience suggests that a renewed reliance on the discount window or on open market operations in securities other than those issued by the United States Treasury could hamper the conduct of monetary policy if it leads to increased pressure on the Fed to affect the allocation of credit.

We present federal funds rates coming from a range of simple monetary policy rules based on multiple economic forecasts. Use our tool to create your own rule. Released quarterly.

The Federal Reserve's balance sheet has undergone significant changes since 2007, reflecting its response to major economic crises. From a modest *** trillion U.S. dollars at the end of 2007, it ballooned to approximately **** trillion U.S. dollars by June 2025. This dramatic expansion, particularly during the 2008 financial crisis and the COVID-19 pandemic - both of which resulted in negative annual GDP growth in the U.S. - showcases the Fed's crucial role in stabilizing the economy through expansionary monetary policies. Impact on inflation and interest rates The Fed's expansionary measures, while aimed at stimulating economic growth, have had notable effects on inflation and interest rates. Following the quantitative easing in 2020, inflation in the United States reached ***** percent in 2022, the highest since 1991. However, by *************, inflation had declined to *** percent. Concurrently, the Federal Reserve implemented a series of interest rate hikes, with the rate peaking at **** percent in ***********, before the first rate cut since ************** occurred in **************. Financial implications for the Federal Reserve The expansion of the Fed's balance sheet and subsequent interest rate hikes have had significant financial implications. In 2023, the Fed reported a negative net income of ***** billion U.S. dollars, a stark contrast to the ***** billion U.S. dollars profit in 2022. This unprecedented shift was primarily due to rapidly rising interest rates, which caused the Fed's interest expenses to soar to over *** billion U.S. dollars in 2023. Despite this, the Fed's net interest income on securities acquired through open market operations reached a record high of ****** billion U.S. dollars in the same year.

Abstract (en): The purpose of the data is to investigate whether and how financial markets have responded to the change in the Federal Open Market Commission (FOMC) disclosure policy, specifically, whether the policy of immediate disclosure has created an announcement effect and whether the policy of immediate disclosure has increased or reduced financial market uncertainty. (1) The files submitted are ND96DATA.DT and ND96PGM.DT, both in ASCII text format. These data are part of ICPSR's Publication-Related Archive and are distributed exactly as they arrived from the data depositor. ICPSR has not checked or processed this material. Users should consult the investigator(s) if further information is desired.

I estimate various backward-looking and forward-looking Taylor rules augmented with variables that indicate proximity to an election and whether the Fed Chair and the majority of a chamber of Congress share the same political party affiliation to investigate whether Congress has influenced Federal Reserve policy from 1961 to 2020. I find that the Fed is susceptible to pressures from the Senate. In line with previous work, left-leaning politicians exhibit a higher tolerance for inflation. This results in the federal funds rate being lower by about 2.35 points when the Democratic party has a Senate majority. Second, while I find some evidence that the House and the Fed Chair sharing partisan affiliation results in tighter policy, this result is not robust to alternative measures of inflation. Finally, I find persuasive evidence that Congressional pressures on the Fed do not create a political monetary cycle around elections.

The narrative approach to macroeconomic identification uses qualitative sources, such as newspapers or government records, to provide information that can help establish causal relationships. This paper discusses the requirements for rigorous narrative analysis using fresh research on the impact of monetary policy as the focal application. We read the historical minutes and transcripts of Federal Reserve policymaking meetings to identify significant contractionary and expansionary changes in monetary policy not taken in response to current or prospective developments in real activity for the period 1946 to 2016. We find that such monetary shocks have large and significant effects on unemployment, output, and inflation in the expected directions. Analysis of available policy records suggests that a contractionary monetary shock likely occurred in 2022. Based on the empirical estimates of the effect of previous shocks, one would expect substantial negative impacts on real GDP and inflation in 2023 and 2024.

The Federal Reserve's balance sheet ballooned following its announcement to carry out quantitative easing to increase the liquidity of U.S. banks in early 2020. The balance sheet continued to grow in the following period as well, with a downward trend in 2023. As of February 29, 2024, the Fed's balance sheet amounted to roughly 7.6 trillion U.S. dollars. The most drastic increase in the observed period took place in the first half of 2020. This measure was taken to increase the money supply and stimulate economic growth in the wake of the damage caused by the COVID-19 pandemic. The Federal Reserve was not the only institution that implemented an expansionary monetary policy in response to the pandemic. For instance, the European Central Bank expanded its money supply in March 2020 and kept doing so over the following months. How do central banks increase the amount of money in circulation? Central banks can increase the money circulating in the economy in many ways. For instance, they can decrease banks’ reserve requirements to stimulate lending or decrease the interest rates to reduce the cost of borrowing for commercial banks. Alternatively, central banks can engage in open market operations (OMO) and buy securities such as government bonds from commercial banks or institutions. By conducting open market operations, the Federal Reserve expanded its balance sheet by seven trillion U.S. dollars between 2007 and 2023. All these measures aim to increase bank loans to entrepreneurs and consumers in order to stimulate employment and economic growth. Impact of COVID-19 on the U.S. economy The COVID-19 pandemic had a tremendous impact on national economies worldwide, and the United States was no exception. During the early months of the crisis, many lost their jobs, mostly those in lower-income categories. As a consequence, many Americans found it difficult to pay their rent and cover basic household expenses. Furthermore, in April 2022, most small business owners claimed that the pandemic had a large or moderate negative effect on their businesses. Overall, the gross domestic product (GDP) of the United States decreased by roughly 2.2 percent in 2020. In the following years, however, it increased notably, surpassing 25 trillion U.S. dollars in 2022.

This paper studies the effects of a conventional monetary policy shock in the USA during times of high financial stress. The analysis is carried out by introducing a smooth transition factor model where the transition between states (?normal? and high financial stress) depends on a financial conditions index. Employing a quarterly dataset over the period 1970:Q1 to 2008:Q4 containing 108 US macroeconomic and financial time series, I find that a monetary policy shock during periods of high financial stress has stronger and more persistent effects on macroeconomic variables such as output, consumption and investment than it has during normal times. Differences in effects among the regimes seem to originate from nonlinearities in both components of the credit channel, i.e. the balance sheet channel and the bank-lending channel.

Replication package data for peer-reviewed article published in Journal of Applied Econometrics. Paper published online May 23, 2016.

Many of the Federal Reserve's (the Fed's) monetary policy operations involve trading with primary dealers. We find that, for agency MBS, dealers charge 2.5 cents (per $100 face value) higher selling to the Fed than to non-Fed customers. Controlling for the same dealer, same security, and same trading time, this discriminatory pricing likely arises from dealers' market power rather than inventory costs. Further, matching trade size reduces the price differential by more than half, implying that dealers' market power greatly relates to the Fed's purchases in large amounts, whereas the Fed's limited breadth of counterparty choice also plays some role.

This is the replication package for "Does Monetary Policy Work Through the Labor Market," accepted in 2024 by the Journal of Political Economy Macroeconomics.

The Banque de France, a sui generis institution with state-owned capital, is part of the Eurosystem. As such, it produces and puts into circulation the banknotes on the national territory, ensures the maintenance of fiat currency and guarantees the quality of its circulation. It holds the foreign exchange reserves of the State and ensures the proper functioning and security of the means of payment. It also carries out additional tasks of general interest on behalf of the State, in particular the handling of over-indebtedness cases, which partly explains the density of its network and the size of its workforce compared to its counterparts. Since 2011, the Bank has been implementing a transformation strategy for 2020 aimed at reorganising its network and reducing its workforce. However, there are still points of vigilance in the design of industrial tools, social expenditure, property management and patronage policy. The expected tightening of European monetary policy could also reduce the Bank’s financial outcome. In this context, a review of its economic and social tasks now appears necessary, in consultation with the State, and the Bank’s transformation will have to continue beyond 2020. Thus, if an important step has been taken at the end of the current strategic plan, the Bank must now prepare to intensify its transformation over the next decade.

This report is available on the Court’s website.

The published files correspond to the data used in the preparation of the report.

Abstract (en): This paper was prepared for the Homer Jones Lecture, Federal Reserve Bank of St. Louis, March 28, 2001. The author addresses the influence of monetarism and the role of money in making monetary policy. The monetarist idea that monetary policy has primary responsibility for inflation is now conventional wisdom. However, monetary aggregates are largely absent from models used by policy analysts and from currency monetary policy debates (at least in the United States). The author concludes with a discussion of whether current models and current practice undervalue the role of money, specifically noting how monetary aggregates may become important again if market interest rates are driven to zero, as they have been recently in Japan. The file submitted is 0109lmd.xls, which shows data and/or calculations for figures in the article. These data are part of ICPSR's Publication-Related Archive and are distributed exactly as they arrived from the data depositor. ICPSR has not checked or processed this material. Users should consult the investigator(s) if further information is desired.

Vietnamese banking data

This paper derives optimal monetary policy rules in setups where certainty equivalence does not hold because either central bank preferences are not quadratic, and/or the aggregate supply relation is nonlinear. Analytical results show that these features lead to sign and size asymmetries, and nonlinearities in the policy rule. Reduced-form estimates indicate that US monetary policy can be characterized by a nonlinear policy rule after 1983, but not before 1979. This finding is consistent with the view that the Fed's inflation preferences during the Volcker-Greenspan regime differ considerably from the ones during the Burns-Miller regime. The file MONTHLY.TXT contains monthly data between 1970.1 and 2000.12 arranged in five columns; the file QUARTERLY.TXT contains quarterly data between 1960.1 and 2000.4 arranged in five columns. The headings OBS, FFRATE, INF, IPI, and UNRATE denote, respectively, the date, Federal Funds rate, CPI inflation rate, Index of Industrial Production, and Unemployment Rate. Additional details can be found the section entitled 3.1 DATA of the paper.

This study applies factor-augmented vector autoregressions to identify the effects of monetary policy shocks in a small, open, emerging market economy. It uses data on 132 variables for Poland, ‘compressing’ them to either structural (having an economic interpretation) or economically uninterpretable factors, also known as diffusion indices. The tightening of monetary policy is found to have broad, contractionary effects. Among other things, production, employment, job offers, prices, loans and stock prices decrease, unemployment and non-performing loans increase. As one of extensions, the effects of changes in global and foreign factors are investigated. Domestic prices are found to respond to global prices of commodities and foreign prices. Domestic production and interest rates – to their foreign counterparts.

The dataset constitutes the data source for the paper "Does the Cost of Private Debt Respond to Monetary Policy?" (Guidolin, Massagli, and Pedio, 2019). This is a hand-constructed dataset of corporate bond portfolio yield series, which is built relying on transactions reported and collected by the Trade Reporting and Compliance Engine (TRACE), a system managed by the Financial Industry Regulatory Authority (FINRA). Treasury data are instead retrieved from FRED.

This study uses a dynamic stochastic general-equilibrium (DSGE) model with sticky information as a laboratory to study monetary policy. It characterizes the model's predictions for macro-dynamics and optimal policy at prior parameters, and then uses data on five U.S. macroeconomic series to update the parameters and provide an estimated model that can be used for policy analysis. The model answers a few policy questions: How does sticky information affect optimal monetary policy? What is the optimal interest-rate rule? What is the optimal elastic price-level targeting rule? How does parameter uncertainty affect optimal policy? Are the conclusions for the Euro-area different?

Data for the paper: Impact of monetary policy on bank efficiency in a transition country: does the restructuring matter?

How does creditor health impact the pass-through of monetary policy to households? Using data on the universe of US credit unions, I document that creditor asset losses increase the sensitivity of consumer credit to monetary policy. Identification exploits plausibly exogenous variation in asset losses and high-frequency identification of monetary policy shocks. Weaker lenders can respond more if they face financial frictions that easing alleviates. The estimates imply constraints on monetary policy become more costly in financial crises featuring creditor asset losses, and that an additional benefit of monetary easing is that it weakens the causal, contractionary effect of asset losses.