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

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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 Bria

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