THE US DOLLAR

Monitory Policy

Monetary Policy for the United States is under the purview of the Federal Reserve System, which serves as its Central Bank tasked with providing a safe, flexible, and stable monetary and financial system through its Board and component parts the 12 Federal Reserve Banks.

Formulating these policies is the Federal Open Market Committee (FOMC), which is the most important monetary policy, making body for the Federal Reserve System, tasked with the formulation of policies that would promote economic growth, full employment, price stability, and sustainable international trade and balance of payments.



Key Personalities and Institutions

George Bush, Jr., President of the United States

Members of the FOMC
: Alan Greenspan, Board of Governors, Chairman
: William J. McDonough, FRB-New York, Vice Chairman
: Roger W. Ferguson, Jr,. Board of Governors
: Edward M. Gramlich, Board of Governors
: Thomas M. Hoenig, FRB-Kansas City
: Edward W. Kelly, Jr., Board of Governors
: Cathy E. Minehan, FRB-Boston
: Michael H. Moskow, FRB-Chicago
: William Poole, FRB-St. Louis

Alternate Members

: Jerry L. Jordan, FRB-Cleveland
: Robert D. McTeer, R., FRB-Dallas
: Anthony M. Santomero, FRB-Philadelphia
: Gary H. Stern, FRB-Minneapolis
: Jamie B. Stewart, Jr., First Vice President, FRB-New York



Interest Rates

The key barometer for US interest rates is the Federal Funds Rate, a misnomer this is actually the rate of interest which banks charge one another for overnight loans. This is usually followed by the market because of its value in assessing tightness of credit market conditions in the banking system and more importantly for FX the stance for monetary policy.

Another key rate to watch is the Discount Rate, which is the interest that the Fed charges on banks for discount loans usually made in the face of liquidity problems. It is important to note that while the discount rate is lower than that of the Fed funds rate banks usually use this as a last recourse due to its implications on their financial stability.



Key Events and Reports to Watch

Key US reports usually followed by market players are

: CPI
: Employment Cost Index
: Employment Report
: GDP National Association of Purchasing Manager's
: Producer Price
: Retail Sales