- • From boardroom decisions to market transactions Are you aware of how the Federal Reserve implements target rate decisions in the open market? We present a primer on the traditional US monetary policy instruments and explain their practical implementations.
- • TAF, TOP, TSLF, PCF, PDCF - the labyrinth of acronyms is expanding and it's easy to get lost. We introduce an ABC-guide to the new Fed credit facilities and explain how they are aimed at easing strains in the financial markets in the light of the liquidity crisis. In addition, we discuss how well the Fed has succeeded in carrying out its intended objectives.
- • Looking forward, we analyse how these new credit facilities may influence the ability of the Fed to conduct monetary policy. The added risky components have dramatically changed the Fed balance sheet and could potentially restrain the Fed's ability to influence the economy in the future.
