Former Fed economists call on FOMC to dump Fed funds rate as main monetary policy tool


Two former Federal Reserve economists are calling on their erstwhile employer to ditch the Federal Funds Rate – the bank's main tool for setting interest rates – in favour of a new framework that would allow the Fed to conduct monetary policy more effectively at a time when the financial system is replete with liquidity.

In a policy brief published by the Peterson Institute for International Economics, Joseph Gagnon, a former associate director of the Fed's Division of Monetary Affairs, and

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