Module XIII·Article II·~1 min read
Central Banks and Monetary Policy
Macroeconomics and Markets
Turn this article into a podcast
Pick voices, format, length — AI generates the audio
Central banks and monetary policy Federal Reserve (Fed) the central bank of the USA (interest rates, QE, regulation) ECB (European Central Bank) the central bank of the Euro (the analogue of the Fed for the EU) Bank of England (BoE) the central bank of Britain Bank of Japan (BoJ) the central bank of Japan People's Bank of China (PBoC) the central bank of China Monetary policy policy of the central bank (interest rates, money) Fiscal policy government policy (taxes, expenditures) Quantitative easing (QE) printing money (the central bank buys bonds, money enters the economy) Quantitative tightening (QT) reduction of money (the central bank sells bonds, less money in the economy) Forward guidance the central bank announces what it is going to do (signals for the market) Interest rate targeting the central bank chooses a target interest rate and manages it Inflation targeting the central bank targets inflation at 2-3% (usually) Dual mandate dual mandate (USA: maximum employment AND price stability) Taylor Rule formula for setting the central bank's interest rate (high inflation = higher rate) Open market operations buying/selling bonds by the central bank (managing money)
§ Act · what next