The Federal Reserve Has Only Limited Tools for Monetary Policy

Wise use, prudence, and respect for markets require a steady hand.

Federal Reserve Board Chairman Jerome Powell speaks during a news conference following a meeting of the Federal Open Market Committee (FOMC) at the headquarters of the Federal Reserve in Washington on June 15, 2022. Drew Angerer/Getty Images

Commentary

Recent turmoil in the banking sector has focused attention on the role of central banks, both in economies and in bank supervision and control.  This will discuss central banks, like the U.S. Federal Reserve, and some of the tools they use to implement their policies, which can be opaque to the average person.