The Federal Reserve switched from using a corridor operating system to using a floor operating system in late 2008. By design, a floor system eliminates the opportunity cost to a bank of holding reserves, allowing a central bank to use its balance sheet as an independent tool of monetary policy....

Nominal GDP level targeting (NGDPLT) has become an increasingly popular monetary policy framework over the past decade. This rising popularity has led to increased interest in, as well as some confusion over, how this framework actually works. This paper attempts to address this interest by...

The Federal Reserve’s transition to a flexible average inflation targeting (FAIT) framework in 2020 has come under intense scrutiny, given its failure to prevent the inflation surge of 2021 and 2022. These developments are the result of both a public misunderstanding about how FAIT works and...