The Road to Normal: New Directions in Monetary Policy

Our main essay focuses on the Federal Reserve’s return to normal monetary policy after seven years of abnormally low interest rates, which were brought on by the financial crisis and Great Recession. The author is Stephen Williamson, an economist at the St. Louis Fed and noted scholar in monetary economics. In his article, he presents a short history of recent unconventional monetary policy and explains how the normalization process is likely to unfold. He also weighs the arguments for and against normalization.

The annual report also includes messages from our new chair of the board of directors, Kathleen M. Mazzarella, and from our president and CEO, James Bullard. Mazzarella writes of the confidence she has in the St. Louis Fed – confidence she feels not just as the leader of the board but also as an everyday consumer and citizen. In his message, Bullard addresses a variety of issues surrounding the normalization of monetary policy, including why the process is expected to take so long and why the rest of the world is not going down the same path.

Elsewhere in this annual report, photos and “by the numbers” tell the story of the St. Louis Fed’s work and people.

Published April 8, 2016