《货币银行学》课程教学资源（PPT课件，英文）Chapter 12 Monetary Policy

Chapter12MonetaryPolicyCopyright 2006byTheMcGraw-Hill Companies,Inc.All rights reservedMcGraw-Hilrwin

McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 12 Monetary Policy

CONTENSa12.1TheFederal Reserve's MonetaryPolicy Toolbox12.2LinkingTools toObjectivesMakingChoices12.3AguidetoCentralBankInterestRates:Taylor Rule21-2

21-2 CONTENS 12.1 The Federal Reserve’s Monetary Policy Toolbox 12.2 Linking Tools to Objectives: - Making Choices 12.3 A guide to Central Bank Interest Rates: Taylor Rule

CONTENSC12.4 Interest Rate Target, Inflation Target andInflation Target12.5MonetaryPolicyTransmissionMechanism12.6Challenges forModernMonetaryPolicymakers21-3

21-3 CONTENS 12.4 Interest Rate Target, Inflation Target and Inflation Target 12.5 Monetary Policy Transmission Mechanism 12.6 Challenges for Modern Monetary Policymakers

The Fed's Monetary PolicyCToolboxThe Federal Reserve has three monetary policytools, also known as monetary policy instrumentsThe target federal funds rate, or the interest rate atwhich banks make overnight loans to each otherThe discount rate, or the interest rate the FedchargesontheloansitmakestobanksThe reserve reguirement, or the level of balances abank is required to hold either as vault cash ondeposit or at a Federal Reserve Bank21-4

21-4 The Fed’s Monetary Policy Toolbox • The Federal Reserve has three monetary policy tools, also known as monetary policy instruments • The target federal funds rate, or the interest rate at which banks make overnight loans to each other • The discount rate, or the interest rate the Fed charges on the loans it makes to banks • The reserve requirement, or the level of balances a bank is required to hold either as vault cash on deposit or at a Federal Reserve Bank

12.1 The Fed's Monetary PolicyaToolbox1.The federal funds rate is the rate atwhich banks lend reserves to each otherovernight, it is determined in the market.ratherthan being controlled by the FedTarget Fed Funds Rate Web LinkMarket (Effective) Fed Funds Rate WebLink21-5

21-5 1. The federal funds rate is the rate at which banks lend reserves to each other overnight, it is determined in the market, rather than being controlled by the Fed • Target Fed Funds Rate Web Link • Market (Effective) Fed Funds Rate Web Link 12.1 The Fed’s Monetary Policy Toolbox

The Fed's Monetary PolicyaToolboxFigure18.1The Market for Bank ReserveseReserveTarget RateSupplyReserveDemandQuantityof Reserves21-6

21-6 The Fed’s Monetary Policy Toolbox

The Fed's Monetary PolicyCToolboxFigure18.2Federal Funds Target Rate and Daily Market Rate,January1992-August2004June30,1998January2,2000September19,2001EffectiveRateFederalFunds TargetRate21-7

21-7 The Fed’s Monetary Policy Toolbox

The Fed's Monetary PolicyC8Toolbox2. Discount Lending - Lender of Last Resort(1) Types of Loans - Web Link·Primary CreditShort-term100 basis points above target FedFunds RateSecondaryCreditFor banks that qualify for primary credit150 basis points above target Fed Funds RateSeasonalCreditSmall banks withcyclical farm loans21-8

21-8 2. Discount Lending – Lender of Last Resort （1）Types of Loans – Web Link • Primary Credit • Short-term • 100 basis points above target Fed Funds Rate • Secondary Credit • For banks that qualify for primary credit • 150 basis points above target Fed Funds Rate. • Seasonal Credit • Small banks with cyclical farm loans The Fed’s Monetary Policy Toolbox

The Fed's Monetary PolicyOToolbox3.ReserveRequirementsThe Monetary Control Act changed therules slightly, so that the Fed can now setthe reserve requirement ratio between 8percent and 14 percent of so-calledtransactions deposits.21-9

21-9 3. Reserve Requirements • The Monetary Control Act changed the rules slightly, so that the Fed can now set the reserve requirement ratio between 8 percent and 14 percent of so-called transactions deposits. The Fed’s Monetary Policy Toolbox

The Fed's Monetary PolicyCCToolboxTable18.1The Tools of U.S.Monetary PolicyWhat Is It?HowIs ItControlled?WhatIs ItsImpact?Target FederalInterestrate charged onSupplyofreservesChanges interest ratesFunds Rateadjustedthroughopenovernightloansbetweenthroughouttheeconomybanks.market operations tomeet expected demandat the target rate.Discount RateInterestrate chargedbySetasapremium overProvides short-termtheFederal Reserve onthetargetfederal fundsliquiditytobanksintimesloanstocommercialrate.of crisisandaids inbanks.controlling thefederalfunds rate.ReserveFraction of depositsthatSetbytheFederalStabilizesthedemandforRequirementbanksmustkeepeitherReserveBoard within areserves.ondepositattheFederallegallyimposedrange.Reserveorascashintheir vaults.21-10

21-10 The Fed’s Monetary Policy Toolbox