Monetary Policy Calculator

Current Federal Funds Rate (%):

New Target Rate (%):

Policy Duration (months):

Current Inflation Rate (%):

Inflation Target (%):

Unemployment Rate (%):

Natural Rate of Unemployment (%):

Current Money Supply ($billions):

Change in Money Supply (%):

Velocity of Money:

Money Multiplier:

Real GDP ($billions):

Current Price Level (Index):

Output Sensitivity to Money:

Equilibrium Real Interest Rate (%):

Inflation Target (%):

Actual Inflation (%):

Output Gap (%):

Inflation Coefficient:

Output Gap Coefficient:

Recommended Policy Rate: 0.00%

Expected Inflation Impact: 0.00%

GDP Growth Effect: 0.00%

Investment Impact: $0.00B

Exchange Rate Effect: 0.00%

Policy Stance: Neutral

Federal Funds Rate: The interest rate at which banks lend to each other overnight, set by the Federal Reserve.

Transmission Mechanism: Policy rates affect long-term rates, investment, consumption, and ultimately economic activity.

Taylor Rule: i = r* + π + 1.5(π - π*) + 0.5(y - y*), where i is nominal rate, r* is equilibrium real rate, π is inflation, and y is output.

Quantitative Easing: Central bank purchases of long-term securities to increase money supply when rates are near zero.

Forward Guidance: Communication about future policy intentions to influence market expectations.

Dual Mandate: Federal Reserve's goals of price stability and full employment.