In This Chapter
The purpose of monetary policy
The Federal Open Market Committee
The Fed’s traditional policy tools
Where the regional Fed Banks fit in
Remember what a big deal the employment report is for financial markets? While the employment report can rattle markets, when the Federal Reserve (the Fed to you insiders) makes an unexpected interest rate move, that’s more like an earthquake!
Yes, nothing gets market attention like a Fed move. And because the Fed is in charge of monetary policy, we first take a look at just what monetary policy is and then talk about how the Fed goes about its business.
Why is there a Federal Reserve? Let’s indirectly get to that by first talking ...