monetary policy
Interest rate management
Monetary policy is how a country's central bank manages the money supply and interest rates to influence economic conditions.
Central banks tighten monetary policy by raising interest rates to slow inflation, or loosen it by lowering rates to stimulate growth.
The Federal Reserve's monetary policy kept rates near zero for years after the financial crisis.
Consistent general price levels
- consumer pricesCosts paid by buyers
- CPIInflation measurement abbreviation
- deflationSustained decrease in prices
- hyperinflationExtreme rapid price escalation
stagflation · purchasing power · disinflation · cost-push · core inflation · price index · credibility · overheating
Asset purchases to boost economy
- discount rateInterest on Fed loans
- lender of last resortEmergency credit source for banks
- bank rateOfficial borrowing cost
- credit controlOversight of borrowing limits
Willing to help others
- rate cutsLowered borrowing costs
- economic recoveryReturn to prosperity
- bailoutEmergency aid preventing bankruptcy
- countercyclicalMoving opposite to trends
pump priming · reflation · soft landing · hard landing · crisis intervention
Convertibility to cash
- M2Broad money supply measure
- quantitative easingAsset purchases to boost economy
- sterilizationComplete elimination of microbes
Rates plotted against maturities
- prime rateBank's benchmark lending percentage
- LIBORInterbank lending benchmark rate
- rate cutLowered borrowing cost
- borrowing costsFees for using loaned funds
price stability
Consistent general price levels
- consumer pricesCosts paid by buyers
- CPIInflation measurement abbreviation
- deflationSustained decrease in prices
hyperinflation · stagflation · purchasing power · disinflation · cost-push · core inflation · price index · credibility · overheating · cooling
quantitative easing
Asset purchases to boost economy
- discount rateInterest on Fed loans
- lender of last resortEmergency credit source for banks
- bank rateOfficial borrowing cost
credit control · financial stability · tapering · accommodation
accommodative
Willing to help others
- rate cutsLowered borrowing costs
- economic recoveryReturn to prosperity
- bailoutEmergency aid preventing bankruptcy
countercyclical · pump priming · reflation · soft landing · hard landing · crisis intervention
liquidity
Convertibility to cash
- M2Broad money supply measure
- quantitative easingAsset purchases to boost economy
- sterilizationComplete elimination of microbes
yield curve
Rates plotted against maturities
- prime rateBank's benchmark lending percentage
- LIBORInterbank lending benchmark rate
- rate cutLowered borrowing cost
- economic lawantitrust law, tax code, commercial law, corporate law, trade law
- Federal ReserveBoard of Governors, FOMC, regional banks
- monetary systemsgold standard, reserve currency, convertibility, par value, central banks
- economicssupply and demand, inflation, GDP, GNP, gross domestic product
- economyGDP, inflation, inflation rate, GNP, market
- governancegovernance, government, democracy, vote, parliament
monetary policyfiscal policy
State spending and taxation
government spending · budgetary policy · taxation policy · tax policy · public expenditure
monetary policylaissez-faire
Noninterference in commerce
gold standard · dollarization · non-intervention · hard money