June 2023

The FOMC's Use of Operational Targets: 85 Years and Counting

Jeffrey Huther, Elizabeth Klee, Kevin Kiernan, and Ethan Rodriguez-Shah


This paper uses summaries of the Federal Open Market Committee’s (FOMC’s) meetings to identify its operational targets and map those to operating regimes. We find that operational targets were more often discussed in the earlier part of the FOMC’s 85-year history, but recent years have seen a resurgence in discussions. We identify distinct operating regimes and find that regimes with discussions of multiple targets, usually rate and quantity pairs, are more common than regimes dominated by discussions of single targets. We document that the current period (the 2007-2009 financial crisis to today) is a notable break in operational targets from earlier periods. We also show that shifts in operational targets occur during recoveries, or after a significant downturn in the macroeconomy.

Keywords: FOMC, monetary policy implementation, asset purchases, federal funds market, repo market

DOI: https://doi.org/10.17016/FEDS.2023.039

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Last Update: June 23, 2023