What is the Federal Reserve's implementation note and how does it differ from the FOMC's postmeeting statement?
Beginning with the December 2015 Federal Open Market Committee (FOMC) meeting, the Federal Reserve began publishing an implementation note along with the FOMC statement. The implementation note provides important details about how the Federal Reserve's policy tools are being used to keep the federal funds rate in the target range established by the FOMC. This step should help increase public awareness and understanding about the normalization of monetary policy.
The implementation note provides the operational settings of the Federal Reserve's policy tools, including the interest rate paid on required and excess reserve balances, the offering rate on the Federal Reserve's overnight reverse repurchase agreements (ON RRPs), and the capacity of the ON RRP facility. In addition, the implementation note reports the primary credit rate charged on borrowing from the discount window. The settings of any other policy implementation tools that the Federal Reserve may decide to use during the normalization process would also be discussed in the implementation note.
The implementation note also includes the directive to the Open Market Desk for the conduct of open market operations for the intermeeting period. Previously, the directive had been published three weeks following each FOMC meeting as part of the minutes of the meeting.
When policymakers change the settings of the Federal Reserve's operational tools, a revised implementation note will be issued. The implementation notes, together with the Committee's postmeeting statements and other FOMC materials, are available on the FOMC calendar page of the Federal Reserve's website.
For more information on the process of monetary policy normalization, visit www.federalreserve.gov/monetarypolicy/policy-normalization.htm.