How the Fed Took Money Out of Monetary Policy
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Aug. 2 (Bloomberg) -- I’ve been thinking a lot aboutmonetary policy recently: not so much the question of will theyor won’t they -- they being Federal Reserve policy makers --provide additional stimulus.
Rather, I’ve been wondering how it is that monetary policystopped being about the quantity of money and started beingabout something else: financial conditions, credit allocation,long-term interest rates, expectations, investor preferences,the maturity of the Fed’s portfolio and relief for specificsectors of the economy (housing). I’ve also been wonderingwhether this is a good or a bad thing.