The Fed’s Monetary Policy Tool Kit Needs an Overhaul

Now that the debt-ceiling bill has been signed and Republicans have gained some traction on matters of fiscal solvency, their focus must turn to a new frontier: monetary policy. One of the biggest drivers of deficit spending is the cost of servicing the debt, which is largely determined by the Federal Reserve’s decisions on interest rates. The next stage of the debate should include looking at the budgetary effects of the central bank’s next move.