Until recently, the Federal Open Market Committee (FOMC) established growth ranges for the broad monetary aggregates (M2 and M3) and domestic nonfinancial debt. For some time, these ranges have not been meaningful indicators in terms of defining specific rates consistent with the goal of price stability. Federal Reserve Chairman Alan Greenspan noted in his October 19 remarks at the Cato Institute, “We have difficulty defining those (money growth) limits with precision, and within any such limits, there remains significant scope for discretion in setting policy.
Suggested citation: "Monetary Policy," Federal Reserve Bank of Cleveland, Economic Trends, no. 00-11, pp. 02-03, 11.01.2000.