Executive's Guide to Fed Policy and Associated Risks: Part 1

Understanding the Role of the Fed and the Tools at Its Disposal

The Federal Reserve holds an outsized position in the well-being of the world economy and smooth functioning of global financial markets. Yet its structure, purpose, and function remain a mystery to many. Knowledge of how its mandate has morphed and broadened over the decades, affecting nearly every aspect of daily living, is key to understanding the Fed’s influence. In this two-part report, we shed some light on a rather cloudy topic, starting with the most basic questions around the Fed’s mandate to the more complex ones that concern the balance sheet and financial stability risks. It is vital for CEOs and the C-suite to have a firm grasp on these themes, especially as the Fed begins tightening monetary policy. 

See Part 2: Understanding Financial Stability Risks as Monetary Policy Shifts