Cleveland Fed Releases Update on Funds Rates Based on 7 Simple Monetary Policy Rules

The median federal funds rate across all forecasts and policy rules increased from 3.52 percent in the fourth quarter of 2022 to 4.29 percent in 2024. (fourth quarter), the Federal Reserve Bank of Cleveland disclosed on Dec. 1. 

Cleveland Fed Funds

This finding is based on information from the bank’s prediction for the federal funds rate as of Nov. 30 and data from three economic forecasts and seven straightforward monetary policy rules.

The bank revealed in a press statement that a central bank’s policy rate, a small number indicator of inflation, and real economic activity could be related through basic monetary policy guidelines. Simple policy guidelines, such as the Taylor rule, are frequently used by monetary planners as a decision-making tool.

Nevertheless, numerous diverse simple rules exist, and no one can agree on the “best.”

Users can create their own simple monetary policy rule and forecast using the spreadsheet provided on the Cleveland Fed’s website, Simple Monetary Policy Rules, which includes full results from the researchers’ analysis, the International Business Times reported. 

Users can get email notifications when the findings are updated once every three months, reports said.

Federal Reserve Bank of Cleveland

The Federal Reserve System is made up of the Board of Governors in Washington, DC, and 12 regional Reserve Banks, including the Federal Reserve Bank of Cleveland.

The Cleveland Fed, a component of the US central bank, participates in the development of monetary policy for the country, oversees banking institutions, offers payment and other services to financial institutions and the US Treasury, and carries out numerous tasks to support the Federal Reserve System operations.

Additionally, the bank promotes community well-being throughout the Fourth Federal Reserve District by engaging in research, outreach, and instructional initiatives.

The Cleveland Fed covers a region that includes Ohio, western Pennsylvania, eastern Kentucky, and the northern panhandle of West Virginia. It has branches in Cincinnati and Pittsburgh.