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Does paying interest on excess balances constitute a change in monetary policy?

April 26, 2017balances constitute excess monetary paying policy

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Does paying interest on excess balances constitute a change in monetary policy?

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No. The stance of monetary policy continues to be set by the target for the overnight federal funds rate established by the FOMC. Paying interest on excess balances just makes it easier for the Desk to implement the target federal funds rate chosen by the FOMC.