How can we gauge the tightness of monetary policy? The SF Fed’s new monthly Proxy Funds Rate page focuses on financial market indicators to measure monetary policy tightness beyond what the federal funds rate level can show.
New evidence suggests that rising oil prices associated with declining oil supply slow economic activities less when interest rates are at the zero lower bound. These oil price spikes can even increase overall output. Evidence points to the following: the nominal interest rate does not react under the zero bound, so the shock reduces the real interest rate, stimulating demand.
The San Francisco Fed is dedicated to building an economy that works for everyone and helping ensure all Americans have the opportunity to fully realize their potential. We champion equity because research has demonstrated it supports our full employment mandate and our mission to promote a healthy and sustainable economy.
The San Francisco Fed is dedicated to building an economy that works for everyone. We thrive on reflecting the people we serve by hiring talented individuals from diverse backgrounds and creating a culture of inclusion where people are respected for what they do and for who they are.