A New Set of Indicators of Reserve Ampleness

Gara Afonso, Kevin Clark, Brian Gowen, Gabriele La Spada, Jc Martinez, Jason Miu and Will Riordan

No 20240814, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: The Federal Reserve (Fed) implements monetary policy in a regime of ample reserves, where short-term interest rates are controlled mainly through the setting of administered rates, and active management of the reserve supply is not required. In yesterday’s post, we proposed a methodology to evaluate the ampleness of reserves in real time based on the slope of the reserve demand curve—the elasticity of the federal (fed) funds rate to reserve shocks. In this post, we propose a suite of complementary indicators of reserve ampleness that, jointly with our elasticity measure, can help policymakers ensure that reserves remain ample as the Fed shrinks its balance sheet.

Keywords: reserves; ample reserves; overnight reverse repo (ON RRP); monetary policy implementation; Federal Reserve (search for similar items in EconPapers)
JEL-codes: E42 E52 G21 (search for similar items in EconPapers)
Date: 2024-08-14
New Economics Papers: this item is included in nep-ifn and nep-mon
References: Add references at CitEc
Citations:

Downloads: (external link)
https://libertystreeteconomics.newyorkfed.org/2024 ... f-reserve-ampleness/ Full text (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fednls:98685

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Liberty Street Economics from Federal Reserve Bank of New York Contact information at EDIRC.
Bibliographic data for series maintained by Gabriella Bucciarelli ().