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Executive's Guide to Fed Policy and Associated Risks: Part 2
Report

Executive's Guide to Fed Policy and Associated Risks: Part 2

Understanding Financial Stability Risks as Monetary Policy Shifts



Editorial Rating

8

Qualities

  • Analytical
  • Applicable
  • Background

Recommendation

The Federal Reserve took extraordinary policy measures to stabilize and boost the US economy in the 2007–2009 Great Recession, as well as during the 2020 COVID-19 pandemic-induced downturn. In this follow-up explainer of the central bank’s inner workings, experts Dana Peterson and Hollis W. Hart explore the systemic risks associated with the Fed’s use of nontraditional monetary tools. Executives and financial professionals will find this a useful primer on the Fed’s policy shifts and adaptations.

Take-Aways

  • The Federal Reserve’s use of unorthodox measures could backfire.
  • Nontraditional measures counter immediate perils but pose other stability risks.
  • It’s unclear whether Fed policy has contributed to rising prices.

About the Authors

Dana Peterson is chief economist at the Conference Board. Hollis W. Hart, a former executive at Citi, is a senior fellow at the Conference Board and an advisory board member at ReferencePoint.


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