[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"detail-sidebar-cat-0-en-105":3,"doc-seo-324537-105":59,"doc-detail-324537-en":131},{"code":4,"msg":5,"data":6},0,"success",[7,13,18,23,28,33,38,43,48,51,55],{"id":8,"doc_module":4,"doc_module_name":9,"category_name":10,"show_sort_weight":11,"slug":12},1,"Document","Story & Novel",90,"story-novel",{"id":14,"doc_module":4,"doc_module_name":9,"category_name":15,"show_sort_weight":16,"slug":17},2,"Literature",80,"literature",{"id":19,"doc_module":4,"doc_module_name":9,"category_name":20,"show_sort_weight":21,"slug":22},4,"Exam",70,"exam",{"id":24,"doc_module":4,"doc_module_name":9,"category_name":25,"show_sort_weight":26,"slug":27},5,"Comic",60,"comic",{"id":29,"doc_module":4,"doc_module_name":9,"category_name":30,"show_sort_weight":31,"slug":32},6,"Technology",50,"technology",{"id":34,"doc_module":4,"doc_module_name":9,"category_name":35,"show_sort_weight":36,"slug":37},7,"Healthcare",40,"healthcare",{"id":39,"doc_module":4,"doc_module_name":9,"category_name":40,"show_sort_weight":41,"slug":42},8,"Research & Report",30,"research-report",{"id":44,"doc_module":4,"doc_module_name":9,"category_name":45,"show_sort_weight":46,"slug":47},9,"Religion & Spirituality",20,"religion-spirituality",{"id":46,"doc_module":4,"doc_module_name":9,"category_name":49,"show_sort_weight":46,"slug":50},"World Cup","world-cup",{"id":52,"doc_module":4,"doc_module_name":9,"category_name":53,"show_sort_weight":52,"slug":54},10,"Lifestyle","lifestyle",{"id":56,"doc_module":4,"doc_module_name":9,"category_name":57,"show_sort_weight":24,"slug":58},19,"General","general",{"code":4,"msg":60,"data":61},"ok",{"site_id":62,"language":63,"slug":64,"title":65,"keywords":66,"description":67,"schema_data":68,"social_meta":124,"head_meta":126,"extra_data":128,"updated_unix":130},105,"en","when-is-a-rate-hike-not-tighter-policy","When Is a Rate Hike Not Tighter Policy?","","An economic analysis explains why an increase in the federal funds rate does not necessarily mean tighter monetary policy. It contrasts conventional expectations that higher rates preempt overheating with the idea that rate moves can be neutral, keeping policy balanced between price stability and sustainable growth. The discussion connects the federal funds rate to the money supply and reserve creation, arguing that changes in the target may be offset by movements in other market rates.",{"@graph":69,"@context":123},[70,84,106],{"@type":71,"itemListElement":72},"BreadcrumbList",[73,77,79,82],{"item":74,"name":75,"@type":76,"position":8},"https://docshare.wps.com","Home","ListItem",{"item":78,"name":9,"@type":76,"position":14},"https://docshare.wps.com/document/",{"item":80,"name":40,"@type":76,"position":81},"https://docshare.wps.com/document/research-report/",3,{"item":83,"name":65,"@type":76,"position":19},"https://docshare.wps.com/document/when-is-a-rate-hike-not-tighter-policy/324537/",{"url":83,"name":65,"@type":85,"image":86,"author":91,"headline":65,"publisher":94,"fileFormat":97,"inLanguage":63,"description":67,"dateModified":98,"datePublished":99,"encodingFormat":97,"isAccessibleForFree":100,"interactionStatistic":101},"DigitalDocument",{"url":87,"@type":88,"width":89,"height":90},"https://docshare.wps.com/thumbnails/when-is-a-rate-hike-not-tighter-policy/324537.png","ImageObject",300,407,{"name":92,"@type":93},"Ava Thompson","Person",{"url":74,"name":95,"@type":96},"DocShare","Organization","application/pdf","2026-11-02","2026-09-21",true,{"@type":102,"interactionType":103,"userInteractionCount":105},"InteractionCounter",{"@type":104},"ViewAction",11,{"@type":107,"mainEntity":108},"FAQPage",[109,115,119],{"name":110,"@type":111,"acceptedAnswer":112},"Why do some explanations claim rate hikes equal tightening policy?","Question",{"text":113,"@type":114},"They argue the Fed raises the federal funds rate to restrain economic growth and keep it in check. The document notes this is a common explanation but not always the correct interpretation.","Answer",{"name":116,"@type":111,"acceptedAnswer":117},"How can an increase in the federal funds rate be neutral rather than tighter?",{"text":118,"@type":114},"In some circumstances the Fed raises the target rate to keep policy from changing due to other market-driven rate movements. The document frames such moves as neutral: neither disinflationary nor contractionary.",{"name":120,"@type":111,"acceptedAnswer":121},"How does controlling the federal funds rate relate to controlling the money supply?",{"text":122,"@type":114},"The text links inflation to the pace of money creation, and it states the federal funds rate reflects how fast money gets created. It explains that failing to adjust the target when other rates rise can lead to faster money growth and a de facto policy stance change.","https://schema.org",{"og:url":83,"og:type":125,"og:title":65,"og:site_name":95,"og:description":67},"article",{"robots":127,"canonical":83},"index,follow",{"doc_id":129,"site_id":62},324537,1790455032,{"code":4,"msg":5,"data":132},{"doc_id":129,"user_id":133,"nickname":92,"user_avatar":134,"doc_module":4,"category_id":39,"category_name":40,"doc_title":65,"doc_description":67,"doc_content":135,"file_id":136,"file_url":137,"file_type":138,"file_size":139,"view_count":105,"is_deleted":4,"is_public":8,"is_downloadable":8,"audit_status":8,"page_count":24,"language":140,"language_code":63,"site_id":62,"html_lang":63,"table_of_contents":141,"faqs":142,"seo_title":143,"seo_description":67,"update_tm":144,"read_time":145,"preview_page_count":4},1649267921044,"https://us-avatar.wpscdn.com/avatar/1800007509477c92dfb?_k=1786009248482753345","by David E.Altig  \nAras,hemch(if no long)anici-pated increases in the federal funds ratehave arrived.The three 25-basis-pointhikes in the target rate taken at the Fed-eral Open Market Committee's mostrecent meetings represent the firstincreases since March 1999.The guess-ing game now revolves around when,not if,we will see future hikes(and howfar they wil go).  \nTo the denizens of conventional-wisdom-land,the reason for the rateincreases,and any to follow,is perfectlyobvious.Despite some moderation inthe second quarter and a still unevenpace ofjob creation,economic growthseems to have hit its stride.The Com-mittee's take on the economy,which itdescribes as “poised to resume astronger pace of expansion going for-ward,\"seems to support the conven-tional view.In addition,the first halfofthe year also brought the first signs ofbroad-based upward pressureon theprices of goods and services since beforethe onsetof the 2001 recession.It mayscem inevitable,then,that right-thinkingcentral bankers would see the tempera-ture on the economic dashboard flirtwith red,and dutifully douse the over-heating economy with the cold waterof tighter monetary policy.  \nThe changing fortunes of the labormarket have,of course,tempered per-ceptions about the underlying pace ofeconomic growth.And despite anincrease in price-level growth this year,the Committee's official view is one inwhich \"the upside and downside risks tothe attainment of price stability...overthe next few quarters are roughly equl.\"Roughly equal does not an imminentacceleration of the inflation trend make,and there is scant evidence that privateinflation expectations are wildly at odds  \n# When Is a Rate Hike Not Tighter Policy?\n\nwith anything beyond a modest north-ward adjustment in price-level growth.Considering those observations togetherwith the most recent reports from labormarkets,sales,and production indica-tors,which have been just fuzzy enoughto give even the optimists pause,mightmake you wonder:Why must interestrates rise?Here,again,the conventionalwisdom:Central bankers,inflation-phobes that they are,don't take chances.Better to preemptively raise interestrates,tighten policy,and restrain eco-nomic growth before problems presentthemselves.  \nIt is certainly true that central bankersexhibit a natural aversion to inflationrates that are too high and too volatile.That is part ofthe job description,afterall.It is further hard to argue with theproposition that monetary policymakersneed to be preemptive—forward-looking is probably a better term—s0that they don't find themselves watchingthe inflation horse galloping out of thebarn.But an increase in the federal fundsrate nced not imply a restrictive courseaimed at putting the brakes to the naturalpace of the recovery.In some circum-stances,an increase in the funds rate tar-get is not a \"tighter\"monetary policy,but a \"neutral\"policy,meaning neitherdisinflationary(it is not done to reducethe inflation trend)nor contractionary (itis not done to artificially restrain eco-nomic growth).In other words,some-times policymakers have to move to stayin the same place.  \nAs the economy evolves,maintaining amonetary policy course that is neitherexpansionary nor contractionary—apolicy that maintains the balance of risksfor both price stability and sustainableeconomic growth,if you will—isinconsistent with a constant level of the  \nAugust 1,2004*  \nNow that the Fed has started to bumpup the federal funds rate,the explana-tion often heard for it is that the Fed is“tightening”monetary policy to keepeconomic growth in check.But some-times the Fed needs to move rates justto keep policy from changing.  \nfederal funds rate.Sometimes therequired adjustment involves a fallingfunds rate,sometimes a rising rate.Automatically characterizing eithersituation as policy “easing\"or\"“tighten-ing\"is off the mark.  \n## ■ When All Is Said and Done,Controlling the FederalFunds Rate EqualsControlling the MoneySupply\n\nIn the world in which we live,inflationis ultimatel","cbCaicwSQSzp2ybV","https://ap.wps.com/l/cbCaicwSQSzp2ybV","pdf",1110158,"English","# When Is a Rate Hike Not Tighter Policy?\n## When All Is Said and Done,Controlling the Federal Funds Rate Equals Controlling the Money Supply","[{\"question\":\"Why do some explanations claim rate hikes equal tightening policy?\",\"answer\":\"They argue the Fed raises the federal funds rate to restrain economic growth and keep it in check. The document notes this is a common explanation but not always the correct interpretation.\"},{\"question\":\"How can an increase in the federal funds rate be neutral rather than tighter?\",\"answer\":\"In some circumstances the Fed raises the target rate to keep policy from changing due to other market-driven rate movements. The document frames such moves as neutral: neither disinflationary nor contractionary.\"},{\"question\":\"How does controlling the federal funds rate relate to controlling the money supply?\",\"answer\":\"The text links inflation to the pace of money creation, and it states the federal funds rate reflects how fast money gets created. It explains that failing to adjust the target when other rates rise can lead to faster money growth and a de facto policy stance change.\"}]","When Is a Rate Hike Not Tighter Policy? | PDF",1789968191,13]