In November 2016, when the Committee discussed using a floor system as part of its longer-run framework, I was among those who saw such an approach as “likely to be relatively simple and efficient to administer, relatively straightforward to communicate, and effective in enabling interest rate control across a wide range of circumstances.” 24 Some have advocated a return to a framework similar to the pre-2007 system, in which the volume of reserves would likely be far below its present level and the federal funds rate would be managed by frequent open market operations.
25 This “corridor” framework remains a feasible option, although, in my view, it may be less robust over time than a floor system. Concluding Remarks After a tumultuous decade, the economy is now close to full employment and price stability. The problems that some commentators predicted have not come to pass.