14 As it turned out, the unemployment rate forecast was once more remarkably accurate, but again this was associated with considerably more accommodation than anticipated.
The current framework relies on the Federal Reserve’s interest rate on reserves to control the federal funds rate, in the context of the provision of ample reserves. In contrast, the pre-crisis framework featured a scarce supply of reserves, which the Federal Reserve would vary on a daily basis to control the federal funds rate by closely matching the demand for reserves.