When the Fed signals how long it expects interest rates to remain at a low level,it is said to be engaging in
A)credit easing.
B)forward guidance.
C)quantitative easing.
D)a maturity extension program.

Question

Quizplus · Accepted Answer

Forward guidance is when the Fed signals to the market about its future monetary policy decisions such as keeping interest rates low. This helps guide investor and consumer behavior as they adjust their financial decisions based on these signals. Credit easing refers to the Fed's efforts in making credit more accessible to businesses and individuals, quantitative easing is when the Fed buys securities to increase the money supply and decrease interest rates, and a maturity extension program refers to when the Fed lengthens the maturity of its holdings to keep interest rates low.

When the Fed Signals How Long It Expects Interest Rates