Monetary Policy Analysis > FOMC Memos on “Yield Targeting”
Date: May 9, 2019
From: Bill Nelson
Subject: FOMC Memos on “Yield Targeting”
Yesterday, Governor Lael Brainard indicated she was interested in hearing more about strategies for targeting the yields on specific securities, such as one- or two-year Treasury notes, as a way to provide additional stimulus.
For those of you who would also like to hear more about such strategies, the FOMC received memos on them in 2010, 2011, and 2013, which have been released to the public. They can be found here, here, and here. In each, the staff indicate the Committee could establish a facility that committed to buy Treasury securities at a target interest rate with maturities out to some specific date. As time passed, the date would approach so the maximum maturity of the eligible securities would decline, but the Committee could always opt to extend the date.
Each of the memos, especially the latter two, also discuss a number of other ways the Committee could stimulate the economy. They are worth a read just to see what other ideas could pop up.
Bill Nelson | Economist
Disclaimer: The views expressed in this post are those of the author(s) and do not necessarily reflect the position of the Bank Policy Institute or its membership, and are not intended to be, and should not be construed as, legal advice of any kind.