The true definition of monetary policy
People love to talk about the Fed's monetary policy. But do they understand what monetary policy truly is? One commentator says the true definition of monetary policy has been avoided by a large number of analysts and publications. Per CNBC:
This definition of the monetary base may be very useful for a lot of purposes. But in terms of trying to determine the stance of monetary policy, it results in a lot of confusion. It's far better for this purpose to instead to think of base money as including not just currency plus reserves but also Treasury bonds held by banks and the public, and well as the debt issued or backed by government-sponsored entities (primarily Fannie Mae and Freddie Mac). There may even be room for including in what I'll call the Policy Base triple-rated corporate debt.