Operational Target

AAA

DEFINITION of 'Operational Target'

Monetary policy objective specified by the Federal Reserve. Operational targets are usually phrased in terms of the changes in the money supply and non-borrowed reserves. These targets are usually reported by the chairman of the Federal Reserve.

INVESTOPEDIA EXPLAINS 'Operational Target'

Operational targets are reported twice a year to Congress. Projected growth is stated as a range within a fiscal year. The reporting requirements for operational targets are specified in the Full Employment and Balanced Growth Act of 1978.

RELATED TERMS
  1. Federal Reserve Bank

    The central bank of the United States and the most powerful financial ...
  2. Money Supply

    The entire stock of currency and other liquid instruments in ...
  3. Credit

    1. A contractual agreement in which a borrower receives something ...
  4. Federal Reserve Board - FRB

    The governing body of the Federal Reserve System. The seven members ...
  5. Monetary Policy

    The actions of a central bank, currency board or other regulatory ...
  6. Deflationary Spiral

    A deflationary spiral is when a period of decreasing prices (deflation) ...
RELATED FAQS
  1. How do open market operations affect the U.S. money supply?

    Formulating a country's monetary policy is extremely important when it comes to promoting sustainable economic growth. More ... Read Full Answer >>
  2. What are some causes of structural unemployment?

    Structural unemployment is a form of unemployment caused by shifts in the economy. It occurs when there is an oversupply ... Read Full Answer >>
  3. What does a high equity risk premium signify about a company's stock future?

    A high equity risk premium signifies that a company's stock future is uncertain. Equity risk premium is the excess return ... Read Full Answer >>
  4. How can companies reduce internal and external business risk?

    A company can reduce negative exposure to business risk by identifying internal risks and external risks. Internal risks ... Read Full Answer >>
  5. How do you calculate the marginal propensity to consume?

    The standard formula for calculating the marginal propensity to consume, or MPC, is marginal consumption divided by marginal ... Read Full Answer >>
  6. What are some common features of a mixed economic system?

    A mixed economy is defined by the co-existence of a public and private sector. The specific mix between public and private ... Read Full Answer >>
Related Articles
  1. Economics

    What Is Fiscal Policy?

    Learn how governments adjust taxes and spending to moderate the economy.
  2. Active Trading

    Leading Economic Indicators Predict Market Trends

    Leading indicators help investors to predict and react to where the market is headed.
  3. Bonds & Fixed Income

    The Fed's New Tools For Manipulating The Economy

    The economy can be volatile when left to its own devices. Find out how the Fed smoothes things out.
  4. Fundamental Analysis

    What Is the Quantity Theory of Money?

    Take a look at the tenets, assumptions and challenges of monetarism's principal theory.
  5. Economics

    What is Productivity?

    Productivity is an economic term describing the relationship between outputs as compared to inputs needed to produce those outputs.
  6. Economics

    The 5 Industries Driving the U.S Economy

    Jobs are being created by the millions, wage growth is picking up and foreign trade is only 30% of the nation’s GDP.
  7. Economics

    How the UK Makes Money

    The United Kingdom has one of the strongest economies in the world thanks to the strength of its services, manufacturing and tourism sectors.
  8. Economics

    Will The US Economy Rebound In The 2nd Quarter?

    Most investors know that U.S. 1st quarter growth numbers aren’t pretty. Economic statistics have been missing expectations by the largest margin since 2009
  9. Economics

    What Part of the Money Supply is M2?

    M2 is the part of the money supply economists use to analyze and predict inflation.
  10. Economics

    Understanding Structural Unemployment

    Structural unemployment is an economic miss-match where workers fail to find jobs and employers with available jobs fail to find workers.

You May Also Like

Hot Definitions
  1. Capital Stock

    The common and preferred stock a company is authorized to issue, according to their corporate charter. Capital stock represents ...
  2. Unearned Revenue

    When an individual or company receives money for a service or product that has yet to be fulfilled. Unearned revenue can ...
  3. Trailing Twelve Months - TTM

    The timeframe of the past 12 months used for reporting financial figures. A company's trailing 12 months is a representation ...
  4. Subordinated Debt

    A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known ...
  5. International Financial Reporting Standards - IFRS

    A set of international accounting standards stating how particular types of transactions and other events should be reported ...
  6. Geometric Mean

    The average of a set of products, the calculation of which is commonly used to determine the performance results of an investment ...
Trading Center