Fed should consider yield curve targeting – Brainard
NY Fed research outlines how US central bank could target longer-run interest rates
The Federal Reserve should consider whether it should use yield curve control in the event of a downturn in the economy, governor Lael Brainard said in a speech on May 8.
Brainard called on the Fed to explore targeting explicit levels of longer-term interest rates as a means to add more stimulus to the economy when short-term rates are zero. The policy is currently being implemented by the Bank of Japan, which calls it “yield curve control” (YCC). It was previously used by the Fed during World
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