We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Nobody downloaded yet

The Description of the Federal Reserve and Federal Open Market Committee - Term Paper Example

Comments (0)
Summary
The reporter states that the Federal Reserve works to stabilize the money market by ensuring stable price and the natural rate of unemployment. Therefore, the employment being above the natural rate, Fed through the Federal Open Market Committee engages in buying and selling bonds and other government securities…
Download full paper
GRAB THE BEST PAPER
The Description of the Federal Reserve and Federal Open Market Committee
Read TextPreview

Extract of sample
The Description of the Federal Reserve and Federal Open Market Committee

Download file to see previous pages... It has, therefore, maintained an inflation target of 2%, but it has been below the targeted value (Board of Governors of the Federal Reserve System). Fed is concerned of the level of inflation in the country. According to FOMC, the increase in the prices of oil has raised inflation and the expected inflation is targeted to be stable in the long run. To ensure that prices are stable, the Fed has to monitor the rate of inflation to minimize the general tendency of the price increase.
The Federal Reserve aims to minimize unemployment by sustaining the current economic growth while maintaining stable prices. It achieves this by mopping out excess money supply when it purchases government securities and bonds. Moreover, Fed believes that unemployment challenges will be addressed by a comprehensive monetary policy.
Through the open market operation, the Federal Reserve controls the buying and selling of securities by adjusting the interest rate. Increasing interest rate encourages people to buy while lowering discourages people to buy. However, in this scenario, the Fed has just used the mouth persuasion that it will buy mortgage-based securities and hold to long-term Treasury securities. In the ideal situation, Fed would have lowered the interest attached to these securities to ensure people sell back to avoid low return on investment.
The Federal Reserve says that it will go on buying agency securities at a rate of $40 billion every month. This move helps in reducing the money supply from the housing sector to stabilize it after the collapse of the bubble in 2008. Moreover, the Fed aims to increase the grace period by which it holds treasury securities thereby decreases the frequency of injecting money to the economy. Fed also argues for reinventing agency debt along with mortgage securities. These measures Fed says are done to put prevent the rate of interest rising thus helping the mortgage market and financial institutions.  ...Download file to see next pagesRead More
Comments (0)
Click to create a comment or rate a document
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
The Federal Open Market Committee
The Federal Reserve Act of 1913 empowers the Federal Reserve Bank of U.S.A to implement the Monetary Policy in the country. The Federal Reserve controls the monetary policy through mainly three policy instruments: open market operations, the discount rate and reserve requirements.
6 Pages(1500 words)Coursework
Federal open market committee
This has impact on the rates of inflation, employment, job creation, productivity and a whole lot of other factors that form part of our financial and economic well being and affect the National Statistics and state of the economy.
4 Pages(1000 words)Essay
Federal Reserve
The structure, roles and the responsibilities of the Federal Reserve has undergone rapid changes over the years which have been mainly stimulated by the events like the Great Depression, Global Financial Crisis, etc. The structure of the Federal Reserve System is composed of a governing board, the open market committee, regional Federal Reserve banks, privately owned banks in US and the advisory councils.
5 Pages(1250 words)Essay
Federal Reserve
Similarly, an increase in the money supply increases the cost of loans and people spend less. This reduces the money supply in the economy. Similarly, when interest rates decrease the exact opposite happens and money supply in the economy increases. 1b) Open-Market Operations: In this method, the sale and purchase by central bank in the security market has desired effect on the money supply in the economy.
3 Pages(750 words)Essay
Federal Reserve and the Open Market
At present, the Fed has four main duties: (1) conducting the nation’s monetary policy by influencing the monetary and credit
4 Pages(1000 words)Essay
Federal Reserve
In explaining the Federal Reserve, the New York Times describes it as having, “exercised more influence over economic growth and the level of employment than any other government entity.” (NYT,
2 Pages(500 words)Essay
Federal Reserve
If the discount rates are moving up, the commercial banks need to revise their rates upwardly and opposite is also true to remain
1 Pages(250 words)Research Paper
Federal Reserve
The report was suggesting that the national economic activities were expanding at a modest rate with the economy characterized by high consumer spending
2 Pages(500 words)Article
Federal Reserve
However, the president and the congress may have said in their operation when there are economic sectors that need immediate attention (Brux,
1 Pages(250 words)Assignment
Federal reserve
It will also evaluate the policies that Federal Reserve used to fix the recession to explain why it was effective in the same. The research arguments will be derived from published articles, credible websites and datasets all for
6 Pages(1500 words)Admission/Application Essay
Let us find you another Term Paper on topic The Description of the Federal Reserve and Federal Open Market Committee for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us