IDEAS home Printed from https://ideas.repec.org/p/fip/fedgfn/2022-06-03-2.html
   My bibliography  Save this paper

Substitutability between Balance Sheet Reductions and Policy Rate Hikes: Some Illustrations and a Discussion

Author

Abstract

This note explores the substitutability between policy rate hikes and reductions in the size of the Federal Reserve's balance sheet for the removal of policy accommodation. We do so using a version of the FRB/US model augmented to incorporate the effects of changes in the Federal Reserve's asset holdings on term premiums.

Suggested Citation

  • Edmund Crawley & Etienne Gagnon & James Hebden & James Trevino, 2022. "Substitutability between Balance Sheet Reductions and Policy Rate Hikes: Some Illustrations and a Discussion," FEDS Notes 2022-06-03-2, Board of Governors of the Federal Reserve System (U.S.).
    • Handle: RePEc:fip:fedgfn:2022-06-03-2
    DOI: 10.17016/2380-7172.3147
    as

    Download full text from publisher

    File URL: https://www.federalreserve.gov//econres/notes/feds-notes/substitutability-between-balance-sheet-reductions-and-policy-rate-hikes-some-illustrations-20220603.htm
    Download Restriction: no
    File URL: https://libkey.io/10.17016/2380-7172.3147?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Otaviano Canuto, 2022. "Quantitative Tightening and Capital Flows to Emerging Markets," Policy notes & Policy briefs 1982, Policy Center for the New South.
    2. Patrick Gruning & Andrejs Zlobins, 2023. "Quantitative Tightening: Lessons from the US and Potential Implications for the EA," Working Papers 2023/09, Latvijas Banka.
    3. Bin Wei, 2022. "Quantifying "Quantitative Tightening" (QT): How Many Rate Hikes Is QT Equivalent To?," FRB Atlanta Working Paper 2022-8, Federal Reserve Bank of Atlanta.
    4. Chaitri Gulati & Andrew Lee Smith, 2022. "The Evolving Role of the Fed’s Balance Sheet: Effects and Challenges," Economic Review, Federal Reserve Bank of Kansas City, vol. 107(no.4), November.
    5. Bin Wei, 2022. "How Many Rate Hikes Does Quantitative Tightening Equal?," Policy Hub, Federal Reserve Bank of Atlanta, vol. 2022(11), July.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedgfn:2022-06-03-2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ryan Wolfslayer ; Keisha Fournillier (email available below). General contact details of provider: https://edirc.repec.org/data/frbgvus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.