Intermediate Targets

DEFINITION of 'Intermediate Targets'

Targets set by the Federal Reserve as part of its monetary policy goals. Intermediate targets can be any economic variable that is not directly controlled by the central bank. Although not directly controlled by the central bank, intermediate targets will often quickly adjust to policy changes and behave in a predictable manner relative to the Federal Reserve's economic goals. These targets pertain either to monetary growth or interest rates.

BREAKING DOWN 'Intermediate Targets'

Often, the Federal Reserve will adjust the Fed Funds Rate to achieve desired intermediate targets. Other indicators are also monitored, such as funds traded, debt and reserves. The Federal Reserve typically has three main tools for implementing its monetary policies: open market operations, discount window lending, and adjusting reserve requirements at depository institutions.

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RELATED FAQS
  1. Why would the Federal Reserve change the reserve ratio?

    Understand the Federal Reserve's monetary policy and the tools it uses to change that monetary policy. Learn about the reserve ... Read Answer >>
  2. What happens if the Federal Reserve lowers the reserve ratio?

    Learn about the Federal Reserve's monetary policy and the tools it uses to control it. Understand what happens if the Federal ... Read Answer >>
  3. What do banks do to control the bank reserve?

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  4. Who determines the reserve ratio?

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  5. How does the Federal Reserve's set discount rate affect my personal finances?

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