Operational Target

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.

BREAKING DOWN '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.

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RELATED FAQS
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  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. Who determines the reserve ratio?

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  4. How do open market operations affect the overall economy?

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  5. How do open market operations affect the money supply of an economy?

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  6. How is money supply used in monetary policy?

    Learn about the three components of the Federal Reserve's monetary policy. Understand how these three components use the ... Read Answer >>
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