The first presentation, by Georgios Georgiadis, is entitled “Global spillovers from multi-dimensional US monetary policy”. In May 2022, the Federal Reserve press release stated that in order to support its goals, the Committee decided to raise the target range for the federal funds rate to 3/4 to 1% and anticipates that ongoing increases in the target range will be appropriate. Additionally, it decided to begin reducing holding of Treasury securities and agency debt and agency mortgage-backed securities later that year.
The Federal Reserve Policies have an impact on the rest of the world. While there has been much empirical work on Fed policy spillovers, little work has been done that at the same time:
- identifies shocks to different Fed measures within a unified framework
- accounts for residual endogenous components in policy surprises
Local responses to Fed policies differ and the Fed may resort to different measures more frequently in future, which means that heterogeneities across Fed responses exist.
This research asks ‘What are the effects of Fed policy on the rest of the world?’ It explores this in three ways: across measures in the Fed toolkit; in terms of transmission channels; and regarding emerging market economy (EME) monetary policy trade-offs.
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