The Federal Reserve last week announced that it would reinvest proceeds from its massive mortgage-bond portfolio, sustaining what Chairman Ben Bernanke had in February called its “extraordinary lending and monetary policies.” But there must eventually be an exit from such policies. And if the chairman is to be taken at his word, the Fed’s exit strategy will involve a sea change in the way it conducts and communicates its policies. In particular, it implies that the Fed will no longer be able to control the critically important fed-funds rate—or indeed any interest rate at all. That would have far-reaching implications for the future of monetary policy.
Bye-Bye to the Fed-Funds Rate
Most Popular Articles
Latest Articles
Spring housing market gets more inventory
We’ve now had back-to-back weeks of healthy housing inventory growth, making spring 2024 much healthier than spring 2023.
-
The best real estate podcasts for agents and brokers in 2024
-
Home sellers saw their profits shrink in the first quarter: Attom
-
If reelected, Trump could seek greater control over Federal Reserve
-
Acra CEO Keith Lind on staying the course amid choppy waters in non-QM
-
HUD walks back some proposed changes to HECM for Purchase program