Minutes of the Federal Open Market Committee – Long-Run Monetary Policy Implementation Framework – “The staff provided several briefings that reviewed progress on a long-term effort begun in July 2015 to evaluate potential long-run frameworks for monetary policy implementation. The briefings highlighted some foundational considerations that are relevant for such an evaluation. The staff described the recent experience of several central banks of advanced foreign economies (AFEs) in implementing monetary policy, noting that they use a wide variety of frameworks to control short-term interest rates and that their approaches have evolved over time. For example, foreign central banks vary in their choice of the interest rate used to communicate monetary policy; in their approach to the provision of reserve balances; and in their use of policies, such as large-scale asset purchases, various funding programs, and negative interest rates, to supplement more traditional means of policy implementation. The staff also described the Federal Reserve’s experience in implementing monetary policy during the recent financial crisis. Before the financial crisis, traditional implementation tools–relatively small-sized open market operations and discount window lending–were adequate for interest rate control even during periods of stress. But the evidence from the period of the crisis and its aftermath suggested that the Federal Reserve’s pre-crisis framework did not enable close control over the federal funds rate when liquidity programs were expanded significantly and subsequently was unable to generate sufficiently accommodative financial conditions to support economic recovery without the use of new policy tools. Finally, the staff noted that various aspects of U.S. money markets, which determine short-term interest rates and are important for transmitting monetary policy, have changed since the financial crisis. The differences include changes the Federal Reserve has made to its policy tools and balance sheet, changes in market participants’ business practices, and the regulatory changes made around the globe to strengthen the financial system. Taken together, these factors may, for example, raise the long-run demand for safe assets, including reserve balances, and they should help make U.S. money markets more stable than they were before and during the financial crisis…”