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Monetary Policy Implementation:
Adapting to a New Environment
Lorie K. Logan, Executive Vice President
October 14, 2021
The views presented here are those of the author and do not necessarily reflect those of the Federal Reserve Bank of New York or the Federal Reserve System

Figure 1: Assets of the Federal Reserve
$ Billions

$ Billions
9,000
8,000

9,000

Other Assets*

8,000

Repurchase Agreements, Swaps, Credit, and Liquidity Facilities**

7,000

Agency MBS

7,000

6,000

Treasuries

6,000

5,000

5,000

4,000

4,000

3,000

3,000

2,000

2,000

1,000

1,000

0
Jan-19

Apr-19

Jul-19

Oct-19

Jan-20

Apr-20

Jul-20

Oct-20

Jan-21

Apr-21

Jul-21

0
Oct-21

Note: *Includes agency debt, gold certificates, special drawing rights, coin; foreign currency denominated assets, bank premises, unamortized
premiums and discounts on securities held outright, accrued interest, net portfolio holdings of the Maiden Lane LLC, and other accounts
receivables. ** Includes repurchase agreements, central bank liquidity swaps, primary and secondary credit, Primary Dealer Credit Facility,
Money Market Mutual Fund Liquidity Facility, Paycheck Protection Program Liquidity Facility, and net portfolio holdings of the Commercial Paper
Funding Facility, Corporate Credit Facilities, Main Street Lending Program, Municipal Liquidity Facility and Term Asset-backed Securities Loan
Facility.
Source: Board of Governors of the Federal Reserve System H.4.1 Statistical Release

2

Figure 2: Liabilities of the Federal Reserve
$ Billions

$ Billions
9,000

9,000
8,000
7,000
6,000

Other Liabilities and Capital

8,000

Reserves
Overnight Reverse Repuchase Agreements

7,000

Treasury General Account (TGA)

6,000

5,000

5,000

4,000

4,000

3,000

3,000

2,000

2,000

1,000

1,000

0
Jan-19

Apr-19

Jul-19

Oct-19

Jan-20

Apr-20

Jul-20

Oct-20

Jan-21

Apr-21

Jul-21

0
Oct-21

Source: Board of Governors of the Federal Reserve System H.4.1 Statistical Release

3

Figure 3: Change in Government Money Fund AUM
and Treasury Bill Supply
$ Billions
600
400
200
0
-200
-400
-600
-800
-1000

Change in Government MMF AUM

-1200

Change in Treasury Bill Supply

-1400
Jan-21

Feb-21

Mar-21

Apr-21

May-21

Jun-21

Jul-21

Aug-21

Sep-21

Oct-21

Note: Government money market funds include 2a-7 money market mutual funds that invest 99.5 percent or more of their total assets in cash,
government securities, and/or repurchase agreements that are collateralized fully.
Source: FRBNY, iMoneyNet

4

Figure 4: Overnight Reverse Repo Usage
$ Billions
1,800
Money Funds

Government-Sponsored Enterprises

Primary Dealers

Banks

1,600
1,400
1,200
1,000
800
600
400
200
0
Jan-14

Jan-15

Jan-16

Jan-17

Jan-18

Jan-19

Jan-20

Jan-21

Source: FRBNY

5

Figure 5: Effective Federal Funds Rate and
FOMC’s Target Range
Percent
0.30

1st to 99th percentile range of trades underlying
the effective federal funds rate

Technical adjustment

Effective federal funds rate

0.25

0.20

0.15

0.10

0.05

0.00
Jan-21

Feb-21

Mar-21

Apr-21

May-21

Jun-21

Note: The gray shaded area indicates the FOMC's target range for the federal funds rate.
Source: FRBNY

Jul-21

Aug-21

Sep-21

6