Too Little Too Late? The Two-Pronged Approach of the Federal Reserve

Gafarov, Bulat and Jens Hilscher

from ARE Update Vol. 25, No. 5, May/Jun, 2022

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Abstract

At its most recent scheduled meetings, the Federal Reserve raised interest rates by 0.25%, 0.5%, and 0.75%. The last three readings of U.S. inflation were 8.5%, 8.3%, and 8.6%—the highest levels in 40 years. So, it is high time to act. However, the Fed has another tool in its arsenal: selling assets on its balance sheet.

Keywords

Inflation, monetary policy, large-scale asset purchases, quantitative easing, real interest rates, Fed balance sheet

Citation

Gafarov, Bulat and Jens Hilscher. 2022. "Too Little Too Late? The Two-Pronged Approach of the Federal Reserve." ARE Update 25(5): 6-8. University of California Giannini Foundation of Agricultural Economics.
https://giannini.ucop.edu/filer/file/1656364114/20446/