Monetary policy implementation with an ample supply of reserves and the Fed’s response to the pandemic

The monetary policy implementation frameworks of the Federal Reserve, the SNB, and many other central banks have changed considerably since the global financial crisis (GFC). The presentation will describe in a stylized way how monetary policy was implemented pre-GFC and how it has changed since. I will discuss some of the benefits of the new framework, particularly as it relates to the provision of liquidity during financial stress. With that background, I will discuss the Federal Reserve’s response to the pandemic and how it was facilitated by the new implementation framework.