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Article: When did the FOMC begin targeting the federal funds rate? What the verbatim transcripts tell us.(Federal Open Market Committee)
- Article from:
- Journal of Money, Credit & Banking
- Article date:
- December 1, 2006
- Author:
CopyrightCOPYRIGHT 2006 Ohio State University Press. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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For some time now the Federal Open Market Committee (FOMC) has been implementing monetary policy by setting an explicit target for the federal funds rate. Surprisingly, the FOMC never formally announced that it had switched back to a funds rate targeting procedure, which it had used prior to the adoption of a nonborrowed reserves operating procedure in October 1979. The lack of a definitive announcement or acknowledgment that it was targeting the funds rate is puzzling. For example, on October 6, 1979, the FOMC formally announced "a change in the method used to conduct monetary policy to support the objective of containing growth of the monetary aggregates over the ...