The Federal Reserve is also the primary federal supervisor of state-member banks, sharing supervisory responsibilities with state supervisory agencies. In this role, Federal Reserve supervisory staff regularly conduct on-site examinations and off-site monitoring to ensure the soundness of supervised state member banks.
The low level of the neutral federal funds rate may be partially attributable to a range of persistent economic headwinds – such as limited access to credit for some borrowers, weak growth abroad, and a significant appreciation of the dollar – that have weighed on aggregate demand. Of course, monetary policy is by no means on a preset course.