The Fed now targets the federal funds rate rather than the money supply.
It is much easier for the Fed to target the federal funds rate in an increasingly globalized economy.

Question

Quizplus · Accepted Answer

Targeting the federal funds rate has become a more effective tool for the Fed in an increasingly globalized economy as it allows them to more directly influence short-term interest rates, which in turn affect a wide range of economic variables. Additionally, as financial markets are becoming more interconnected and capital flows more fluid, it is becoming more difficult for the Fed to control the money supply as it can be influenced by factors beyond their control.

The Fed Now Targets the Federal Funds Rate Rather Than