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September/October 2011

In This Edition

  • A Comprehensive Revision of the U.S. Monetary Services (Divisia) Indexes

    The authors introduce a comprehensive revision of the Divisia monetary aggregates for the United States published by the Federal Reserve Bank of St. Louis, referred to as the Monetary Services Indexes (MSI). These revised MSI are available at five levels of aggregation, including a new broad level of aggregation that includes all of the assets currently reported on the Federal Reserve's H.6 statistical release.

  • A Foreign Exchange Intervention in an Era of Restraint

    The Japanese yen appreciated strongly and rapidly against other major currencies in the wake of the massive March 11, 2011, Tohoku earthquake. High volatility and disorder in financial markets prompted the G-7 authorities to jointly intervene to weaken the yen.

  • A Survey of Announcement Effects on Foreign Exchange Volatility and Jumps

    This article reviews, evaluates, and links research that studies foreign exchange volatility reaction to macro announcements. Scheduled and unscheduled news typically raises volatility for about an hour and often causes price discontinuities or jumps. NOTE: The table on pp. 368-369 was revised after publication.

  • Independence + Accountability: Why the Fed Is a Well-Designed Central Bank

    In 1913, Congress purposefully created the Federal Reserve as an independent central bank, which created a fundamental tension: how to ensure the Fed remains accountable to the electorate without losing its independence. Over the years, there have been changes in the Fed's structure to improve its independence, credibility, accountability, and transparency.