Which of the following statements is an example of the Fed's conditional commitment policy?
A)"In these circumstances,the Committee believes that policy accommodation can be maintained for a considerable period."
B)"The Committee anticipates that weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time."
C)"Policy accommodation can be removed at a pace that is likely to be measured."
D)"The exceptionally low range for the federal funds rate will be appropriate at least as long as the
Unemployment rate remains above 6-1/2 percent,and inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee's 2 percent longer-run goal."

Question

Quizplus · Accepted Answer

Choice D is an example of the Fed's conditional commitment policy because it sets specific conditions for the continuation of the current monetary policy stance. The statement indicates that the Fed will maintain the current interest rate range as long as certain economic conditions persist, demonstrating the Fed's commitment to data-dependent policy decisions. Choices A, B, and C also reflect the Fed's policy stance but do not provide specific conditions for maintaining or changing that policy, so they are not examples of the conditional commitment policy.

Which of the Following Statements Is an Example of the Fed's