The Federal Reserve in the US monetary policy normalization (2017-2019)
The aim of this dissertation is to analyse the conduction of the so-called “normalization” of monetary policy by the Federal Reserve: theoretical foundations, perceptions, instruments, intended results. The normalization began in 2015, with the first increase in the federal funds rate in nearly a decade. The recovery of economic activity and employment led the Fed to formalize the normalization in the last quarter of 2017, with asset sales to reduce its balance sheet and progressive increases in interest rates. The research highlights this period and its peculiar and quite original character. It is about analyzing the ideas and conceptions that guide the Fed in this process, as well as the instruments used and the communication. The methodology emphasizes the analysis of the Fed documents and the literature regarding its performance, as well as the used instruments. Fed monetary policy decisions are adopted especially by the Federal Open Market Committee (FOMC). The first documents analysed were the Monetary Policy Report. They contain information on the state of the real and the financial economy, economic projections and the description of changes in monetary policy and regulation promoted by the FOMC, in addition to the assessments of the institution. There has also been consulted other official Fed documents that are not periodic or are not directly linked to FOMC monetary policy decisions. Other relevant documents were the statements to press, speeches and research authored by members of the staff of the Fed and by its directors.