The continued use of a currency depends on the stability of its value and the existence of alternatives for achieving final settlement.

Longer-term yields declined by relatively large amounts on days when the FOMC made specific QE announcements. However, the objective of QE has been to reduce long-term yields beyond the levels they would have reached without QE.

Would financial markets and the economy have been better off if the Fed pursued a policy of quantitative easing sooner?

The behavior of term OIS rates following the three instances of FOMC verbal guidance provides no support for the efficacy of the FOMC’s forward guidance monetary policy.

The excess supply of commercial and residential real estate might explain why the historically low nominal and real interest rates have had relatively little effect on stimulating investment.

As the IOER rate increases, less money will be given to the Treasury and more will be given to banks for the sole purpose of holding excess reserves (i.e., idle deposits at Federal Reserve Banks).

Our approach offers several advantages over LSAPs as a financial mechanism to enhance forward guidance.

The enormous quantity of excess reserves can create an even greater expansion in the money supply.>

The economy is too complex to be summarized by a single rule. Economies are constantly changing in ways difficult to explain after the fact and nearly impossible to predict. Consequently, policymakers seem destined to rely on discretion rather than rules.

If investment spending is sufficiently insensitive to interest rate changes and the effect of Fed actions on interest rates is sufficiently weak, the net effect of the persistent zero interest rate policy could be negative.