At the New York Fed, our mission is to make the U.S. economy stronger and the financial system more stable for all segments of society. We do this by executing monetary policy, providing financial services, supervising banks and conducting research and providing expertise on issues that impact the nation and communities we serve.
The New York Fed’s Open Market Trading Desk (“the Desk”) is responsible for aggregating and analyzing information on financial markets and investor expectations, among its many duties. This information is central to our ability to deeply understand and explain financial market developments to policymakers. We gather market intelligence in several ways, including by speaking regularly with market participants, analyzing financial market instruments, and administering surveys.
In remarks at Binghamton University on October 10, New York Fed President John Williams spoke about how the imbalances in the economy and labor market have dissipated and how inflation is moving sustainably toward 2 percent. He also discussed the decision by the Federal Open Market Committee (FOMC) to move the stance of monetary policy toward a more neutral setting. And he gave his economic outlook.
On Thursday, September 26, New York Fed President John Williams spoke at the 10th U.S. Treasury Market Conference about how the annual interagency collaboration has strengthened the understanding of Treasury market resiliency and that of adjacent markets. He also shared news about the New York Fed’s ongoing commitment to ensuring that the financial system continues to stand on a strong foundation of reference rates.
In remarks delivered at the Council on Foreign Relations, New York Fed President John C. Williams spoke about the economy, supply and demand balance, and bringing inflation back down to the Federal Open Market Committee’s (FOMC’s) 2 percent longer-run goal. He also discussed the progress made toward the Federal Reserve’s dual mandate goals of maximum employment and price stability, as well as the path ahead for monetary policy.
For most of modern history, stocks and bonds were pieces of paper. Sixty years ago, buying a financial security or taking it as collateral meant receiving a certificate about five days later. This worked well enough for decades, but by 1968 there was so much paper that settlement became unmanageable, and the ensuing crisis forced Wall Street to start using computers to keep track of paper securities. This transition took about four years and did not go smoothly. In the time it took for Wall Street to modernize, NASA’s Apollo program managed four moon landings.
On May 20 and 21, 2024, the Federal Reserve Board and the New York Fed jointly hosted the Third Conference on the International Roles of the U.S. Dollar. The conference brought together researchers, practitioners, and policymakers to understand how changes in the global economic and financial landscape may affect the central role of the dollar.
In recent articles, we introduced the Fed’s policy implementation framework, the role of the Fed’s balance sheet, and the Fed’s standing liquidity facilities. In this article, we use those key concepts to discuss recent developments in monetary policy implementation and how the Fed’s tools work in practice.
An ample supply of reserves—consistent with the Fed’s “floor system”—and the smooth functioning of funding markets are critical to effectively implement monetary policy. Market disruptions occasionally require the rapid provision of additional liquidity. One way to do this is through open market operations conducted with primary dealers, in which the Fed increases the reserve supply either temporarily or more permanently.
The Fed’s balance sheet, like any financial balance sheet, is a record of the assets acquired—either through open market operations or backstop lending—and the liabilities issued to fund those assets. So, it can be thought of as a record of monetary policy and other actions the Fed took to achieve its “dual mandate” and other responsibilities. In this article, we discuss the evolution and role of the Fed’s balance sheet in monetary policy and its implementation.
The Federal Reserve System is the central bank of the United States. Its key entities are the Board of Governors, which is an independent federal government agency, 12 regional Federal Reserve Banks, and the Federal Open Market Committee (FOMC). The FOMC includes members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four other regional Reserve Bank presidents who serve on a rotating basis. You might hear these entities more often referred to collectively as “the Fed,” for short.
