Difference between revisions of "Tightening"

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*See related terms [[Hawkish]] and [[Dovish]].


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A [[central bank]] is said to be tightening an [[economy]] when it increases [[interest rates]]. The goals of tightening include managing growth, controlling [[inflation]] and reducing the amount of available [[credit]].<ref>{{cite web|url=http://smallbusiness.chron.com/effects-tightening-monetary-policy-3870.html|name=The Effects of Tightening Monetary Policy|org=Small Business Chron|date=February 14, 2011}}</ref>


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== Tightening Moves By The Federal Reserve ==
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The tightening of monetary policy by the [[Federal Reserve]] in 1979, led by then-Fed-chairman [[Paul Volcker]], broke the back of [[price]] acceleration in the United States, ushering in a two-decade long decline in inflation.<ref>{{cite web|url=http://www.federalreserve.gov/boarddocs/speeches/2004/20040103/default.htm|name=Alan Greenspan: Risk and Uncertainty in Monetary Policy|org=Federal Reserve|date=February 14, 2011}}</ref>


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== References ==
== References ==
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[[Category:Market Terms]]
[[Category:Definitions]]
[[Category:Federal Reserve System]]
[[Category:Central Banks]]

Latest revision as of 08:14, 28 July 2016

A central bank is said to be tightening an economy when it increases interest rates. The goals of tightening include managing growth, controlling inflation and reducing the amount of available credit.[1]

Tightening Moves By The Federal Reserve[edit]

The tightening of monetary policy by the Federal Reserve in 1979, led by then-Fed-chairman Paul Volcker, broke the back of price acceleration in the United States, ushering in a two-decade long decline in inflation.[2]


References[edit]