Journal Article

Federal Reserve control of credit


Abstract: In the early days of the Federal Reserve, changes in the discount rate were the principal instrument through which the central bank exercised control over credit conditions. In this address, Strong explains the use of discount rate changes as a means of controlling the volume of credit and influencing interest rate movements. He considers criteria for discount rate changes, concluding that in the absence of gold movements under a reestablished gold standard, policy makers have no option but to look to general economic conditions.

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Provider: Federal Reserve Bank of New York

Part of Series: Quarterly Review

Publication Date: 1989

Issue: Special

Pages: 6-14