Federal Reserve monetary policy framework

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The Federal Reserve monetary policy framework is the set of goals, principles, and tools that guide the U.S. central bank’s decisions on interest rates and money supply to promote stable prices, maximum employment, and sustainable economic growth.

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Predicate Object
instanceOf macroeconomic policy regime
monetary policy framework
appliesTo Federal Reserve System
articulatedBy Federal Open Market Committee
articulatedIn Federal Reserve monetary policy framework self-linksurface differs
surface form: Statement on Longer-Run Goals and Monetary Policy Strategy
basedOn Federal Reserve Act of 1913
surface form: Federal Reserve Act
country United States of America
surface form: United States
goal financial stability
maximum employment
moderate long-term interest rates
price stability
sustainable economic growth
governs FOMC policy decisions
guidedBy dual mandate
includesConcept Phillips curve framework
surface form: Phillips curve

average inflation over time
flexible inflation targeting
inflation expectations
maximum employment as a broad-based and inclusive goal
monetary policy transmission mechanism
natural rate of unemployment
neutral interest rate
output gap
risk management approach
symmetric inflation objective
includesFeature communication strategy through FOMC statements and projections
data-dependent decision-making
explicit longer-run inflation goal of 2 percent
flexible approach to achieving maximum employment
forward-looking orientation
use of a wide range of economic indicators
influences credit conditions
economic growth
employment level
inflation rate
long-term interest rates
money supply
short-term interest rates
notableRevisionYear 2012
2020
reviewedBy Federal Open Market Committee
subjectTo periodic review
timeHorizon medium term
usesTool balance sheet policy
discount window lending
federal funds rate target
forward guidance
interest on reserve balances
large-scale asset purchases
maturity extension program
open market operations
overnight reverse repurchase agreements
quantitative easing
quantitative tightening
reserve requirements
standing repo facility
standing reverse repo facility

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Referenced by (3)

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Full Employment and Balanced Growth Act of 1978 relatedTo Federal Reserve monetary policy framework
Federal Reserve monetary policy framework articulatedIn Federal Reserve monetary policy framework self-linksurface differs
this entity surface form: Statement on Longer-Run Goals and Monetary Policy Strategy
Allan H. Meltzer hasWrittenOn Federal Reserve monetary policy framework
this entity surface form: Federal Reserve policy