Governor Frederic S. Mishkin At the Tuck Global Capital Markets Conference, Tuck School of Business, Dartmouth College, Hanover, New Hampshire, February 15, 2008
“In recent months, the Federal Reserve has faced a more difficult policy environment as a result of disruptions to the financial markets. We have attempted to address the resulting challenges by using four tools. First, we have conducted open market operations to increase the supply of reserves and keep demands for increased liquidity from causing sharp increases in interest rates. Second, we have provided liquidity through the discount window by lowering the spread between the discount rate and the federal funds rate. Third, we have developed a new source of liquidity–the Term Auction Facility–to provide a fixed amount of funds for a one-month term at a competitively determined interest rate. Finally, we have lowered the target federal funds rate in a timely, decisive, and flexible manner to help mitigate macroeconomic risk. Although financial disruptions present one of the most difficult challenges that central banks can face, I believe that these measures have been appropriate for achieving our macroeconomic objectives of promoting price stability and maximum sustainable employment.”
Sorry, comments are closed for this post.