How severe has the zero lower bound constraint been?

Eric T Swanson 08 November 2014

a

A

In December 2008, the Federal Reserve’s Federal Open Market Committee lowered the federal funds rate to essentially zero, and has kept it there ever since. Because physical currency earns an interest rate of zero, it is generally impossible for the Open Market Committee to lower the federal funds rate substantially below zero, since banks would opt to hold physical currency rather than earn a significantly negative rate of return on cash balances held at the Fed. This barrier is commonly referred to as the ‘zero lower bound’.

a

A

Topics:  Global crisis Monetary policy

Tags:  zero lower bound, monetary policy, Federal Open Market Committee

Federal Open Market Committee forecasts: Guesses or guidance?

Peter Tillmann 23 February 2012

a

A

 

a

A

Topics:  Macroeconomic policy Monetary policy

Tags:  inflation, monetary policy, transparency, Federal Reserve, forecasting, Federal Open Market Committee

Events