FOMC discusses communication ‘escape clauses’

Fed might need “leeway” to deal with financial instability, some FOMC members say

US Federal Reserve
Photo: US Federal Reserve

The Federal Reserve has been looking at how other central banks deal with the interaction between financial stability and monetary policy in their forward guidance.

Several members of the Federal Open Market Committee discussed using financial instability “escape clauses” in policy communication, the minutes of its January meeting reveal. The minutes also show FOMC members voicing concerns about rising levels of leveraged debt in the US.

The clauses could help avoid large interest rate

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