Problem
How does the Federal Reserve's FOMC communicate its monetary policy decisions? Go to the FOMC Calendar (see FOMC Documents link above) and download the Statement PDF from the Sept 20-21 and Nov 1-2 FOMC meetings in 2022. Read the two statements carefully and match the following questions to the correct statement:
• What was the Nov 1-2 decision about interest rate policy (federal funds rate)?
• What did the Nov 1-2 statement have to say about new monetary policies related to Forward Guidance?
• What did the Nov 1-2 statement have to say about new monetary policy called Quantitative Easing?
• What were the main changes (if any) in the wording of the policy decisions in the Nov 1-2 meeting Statement compared to those in the Sep 20-21 Statement?
1. The FOMC raised their target for the fed funds rate from 3-3 1/4 percent to 3 3/4-4 percent (change in policy).
2. The Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in the Plans for Reducing the Size of the Federal Reserve's Balance Sheet that were issued in May.
3. The Committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time.
4. Increased interest rates for the federal funds target, repurchase agreements, and reverse repurchase agreements.