Steven Engelhardt

In the course of preparing for Level 1 of the CFA Exam, I learned a few interesting things about the Fed I did not previously know:

• The Fed does not directly control the Federal funds rate. Instead, the Fed publishes a target for the Federal funds rate and attempts to hit it by using open market operations.
• It is a relatively recent development for the Fed to target the Federal funds rate. Before this, the Fed would often target the money supply.
• The Federal Reserve Bank of New York has a special place above all other regional Federal Reserve Banks. The representative from the New York Fed is a permanent member of the Federal Open Market Committee (FOMC), and all open market operations are conducted by the New York Fed under direction from the FOMC.