U.S. Monetary-Policy Evolution and U.S. Intervention
13 Pages Posted: 28 Oct 2011
Date Written: October 27, 2011
The United States all but abandoned its foreign-exchange-market intervention operations in late 1995, when they proved corrosive to the credibility of the Federal Reserve’s commitment to price stability. We view this decision as the culmination of the evolution of U.S. monetary policy over the past century from a gold standard to a fiat money regime. The abandonment of intervention was necessary to secure monetary policy credibility.
Keywords: Trilemma, central-bank independence, intervention, monetary policy, swap lines, warehousing
JEL Classification: F3, N1, N2
Suggested Citation: Suggested Citation