ESSAY : The Federal Reserve’s Current Monetary Policy

The Federal Reserve Act requires the Federal Reserve Board to submit written reports to Congress containing discussions of “the conduct of monetary policy and economic developments and prospects for the future” (Congressional Report, (Links to an external site.)Links to an external site.Visit the Federal Reserve (Links to an external site.)Links to an external site. website and select Monetary Policy and then to retrieve the current annual report.

Briefly describe the policy actions of the Board of Governors during the most recent period.
Describe how the U.S. economy has performed recently based on the opinion of the Federal Reserve.
Evaluate the Federal Reserve’s current monetary policy. If you were the monetary policy decision maker, what would you do differently? Why or why not?
Explain whether you agree or disagree with the Federal Reserve taking action to intervene when the economy is not well-functioning. Why or why not?
Appraise how the current Federal Reserve’s monetary policy has been affecting the financial markets and institutions.

SAMPLE SOLUTION

The Federal Reserve Board governs the Federal Reserve System, typically known as federal reserve or simply Fed. The board of governors oversees the Federal Reserve Banks and the implementation of the American monetary policy (Heinemann, In Klüh, & In Watzka, 2017). This paper focuses on the various activities associated with the board.

Policy Actions of the Board in the Most Recent Period One of the recent policy actions by the federal reserve board entail approval of an increased discount rate. On 27^th September 2018, the board approved actions by the directors of federal reserve banks of Minneapolis and New York which aimed at increasing the primary credit rate from 2.50% to 2.75%. A higher discount rate triggers an upsurge in other interest rates since it represents the cost of credit for a significant number of banks and other financial institutions. The new rate took effect immediately. The…