Conducting Monetary Policy Without Government Debt: The Fed's Early Years

The Federal Reserve implements its monetary policy by using open market operations in United States government securities to target the federal funds rate. A substantial decline in the stock of United States Treasury debt could interfere with the conduct of monetary policy, possibly forcing the Fed to rely more heavily on discount window lending or to conduct open market transactions in other types of securities. Either choice would cause the implementation of monetary policy to resemble the methods used by the Fed before World War II. This paper describes two things: (1) how the Fed implemented monetary policy before the war and (2) the conflicts that arose within the Fed over the allocation of private-sector credit when discount window loans and Fed purchases of private securities were a substantial component of Federal Reserve credit. Those conflicts help explain the Fed's failure to respond vigorously to the Great Depression. The experience suggests that a renewed reliance on the discount window or on open market operations in securities other than those issued by the United States Treasury could hamper the conduct of monetary policy if it leads to increased pressure on the Fed to affect the allocation of credit.

美国联邦储备系统（The Federal Reserve，下称美联储）通过开展美国政府证券公开市场操作，以将联邦基金利率（federal funds rate）作为调控目标实施货币政策。美国国债（United States Treasury debt）存量的大幅缩减可能会干扰货币政策的实施，或迫使美联储更多依赖贴现窗口贷款，或是针对其他类型证券开展公开市场交易。无论选择哪种路径，货币政策的实施都将与二战前美联储的操作模式趋同。本文阐述了两项核心内容：其一，二战前美联储的货币政策实施方式；其二，当贴现窗口贷款与美联储购买私人证券成为美联储信贷资产的重要组成部分时，美联储内部围绕私人部门信贷配置产生的诸多分歧与冲突。这些分歧与冲突有助于解释美联储为何未能对大萧条（Great Depression）做出强有力的应对。本次历史经验表明，若重新依赖贴现窗口，或是针对美国国库券以外的证券开展公开市场操作，且因此给美联储带来要求其干预信贷配置的额外压力，则可能会阻碍货币政策的有效实施。