¶ … Fed's Bullard: Current Fed Policy Much Easier Now Than in 2012, which was published by The Wall Street Journal on February 14th, 2013, financial reporter Michael S. Derby methodically examines the claims of Federal Reserve officials, who have stated that changes to their monetary policy have proven to be productive over the last year. The purpose of the article is to provide readers with access to the latest public statements made by Federal Reserve Bank of St. Louis President James Bullard, a voting member of the monetary policy setting Federal Open Market Committee (Derby, 2013) who recently rendered his appraisal of the Fed's latest round of adjustments to its monetary policy. Derby makes reference to a crucial modification in which "the Fed decided to commit to keeping short-term interest rates near zero percent until what is now a 7.9% unemployment rate falls below 6.5%, as long as expected inflation doesn't go above 2.5%"...
The article also contains numerous quotes referencing Bullard's evaluation of the Fed's policy on the purchase of bonds, with the central bank official stating in a speech that "the open ended nature of the Fed's bond buying may mean that the current size of the purchases may need to be increased or decreased depending on how the economy performs" (Derby, 2013). The overall emphasis of Derby's article remains focused throughout on the new course embarked on by the Fed when it comes to monetary policy, with the author making it clear that these maneuvers continue to be economically effective.
Monetary Policy Every economic activity in the United States is related to the policies that are decided by the monetary policies of the nation that are formulated. This involves all activities like purchase of houses, starting up of new business enterprises, and expansion of businesses, investments in new plants or machinery. It also affects our investment decisions like putting our investments in banks, bonds, or the stock market. It is also
Federal Reserve Board is the most powerful financial institution in the country and is actually the Central bank of United States. This institution is responsible for regulating financial system of the country by formulating monetary policies and by changing the fund rates. The Fed is not completely independent and works together with the administration and the Department of the Treasury. It is responsible for formulating and implementing monetary policies in
Monetary Policy and Mortgages The businesses of mortgages lead to their own problems. Recently it was stated by the attorney for the Western District of Missouri that the owner of a mortgage invest company and three employees of Ameriquest Mortgage were charged with an indictment. The effort made by them was to cheat Ameriquest and some investors through the process of false loans for mortgage. Brent Michael Barber who is 40
Demand-Side Policies and the Great Recession of 2008 A recession can be defined as an overall downward spiral in a nation's economy. In particular, the outcome of recession is high inflation, high level of unemployment slowing down its gross domestic product (GDP) (Study, 2016). In this period there is an economic weakening and is usually accompanied and further complicated by decrease in the stock market, an upturn in unemployment and also
When interest rates are low, people have a greater incentive to borrow and to spend money. That new car or home they have been 'putting off,' seems much more attractive when the interest rate is nearly zero! But perhaps "the most effective tool the Fed has, and the one it uses most often, is the buying and selling of government securities in its open market operations. Government securities include treasury
The Federal reserve realized the big negative impact of MBS and announced a 600 billion program in November 2008 to purchase these securities and this helped to bring back some liquidity into the market. In March 2009, it added another $750 billion to bring the total to $1.25 trillion. The Fed has the power to create or print more money to increase money supply in the market and this is exactly
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