They typically emphasized such measures as reducing the size of public sector employment,
tightening money supplies to control inflation, and reducing trade barriers to stimulate cross-border competition.
Based on its Phillips curve projections, the FOMC is therefore taking steps to aggressively
tighten the money supply.
Due to CBN's fixation with fixing exchange rates at a subsidized rate, it had to
tighten money supply leading to a high monetary policy rate of 14 % with other interest rates following from that high base.
And the Federal Reserve has shown time and time again that it is capable of
tightening the money supply quickly just as an economic recovery begins.
For example, to
tighten the money supply and decrease the amount of money available in the banking system, the Fed sells government securities.
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Not exact matches
There are some estimates that the impact of that is the equivalent of 1 percentage point rate hike, because it is a form of
tightening — you're reducing the
money supply.
As noted above, this passive
tightening in monetary policy implies there would be a decline in the
money supply and
money velocity occurring during this time.
A passive
tightening of monetary policy occurs whenever the Fed allows total current dollar spending to fall, either through a endogenous fall in the
money supply or through an unchecked decrease in
money velocity.
3) Although its M2
money supply is still growing at close to 10 % / year, there has been a significant
tightening of China's monetary conditions over the past 18 months.
When one country
tightens its monetary policy (i.e., raises interest rates and / or contracts its
money supply) while another is easing (i.e., lowering interest rate and / or expands its
money supply) or holding steady, this provides the opportunity not only for carry — assuming the country
tightening its monetary policy has a higher - yielding currency to begin with — but for capital appreciation as well.
If the
money supply is
tightened, the interest rate will be higher.
Unclear how the SNB would
tighten policy; maybe issue central bank bonds to reduce
money supply?
Tightening of
money supply causes a contraction which creates a slowdown which spreads through the economy.