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FED Watch: Monetary Policy Analysis

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Added on  2019-09-23

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This article provides an in-depth analysis of the monetary policy by FED Watch. It covers topics such as FOMC, policy tools, Chairman testimony, Beige Book report, and more. The article also discusses the recent discussions and decisions made by the committee regarding financial stability and monetary policies.
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WEB FED ASSSIGNMENTFED WATCH: Monetary Policy AnalysisThe part and parcel of monetary policy is FOMC or Federal Open Market Committee. Itcomprises of twelve people from the Board of Governors of the Federal Reserve and ReserveBank’s five Presidents. There are 8 meetings of the committee that are held annually, and ifrequired, additional meetings are held.FOMC: Federal Open Market CommitteeThe information shows that the person who is the permanent member of the committee is thePresident of The New York Reserve Bank, and he remains permanent all through. Chicago andCleveland changes alternatively and the three rotating Presidents are from Philadelphia, Dallas,and Minneapolis. The voting rights are enjoyed by Cleveland, New York, St. Louis, Boston andKansas City. The FOMC StatementThe statement of FOMC showed that the rate of inflation was steady, and it was less than 2%which was their target. There was slowness in the labor market as more people continued to getengaged in the economic activities. There was a decline in the level of unemployment and thejob gains. The level of inflation was such because the energy and the non-energy import pricesdeclined. On observing this, the Committee pushed for price stability and gaining maximumemployment. The committee believed that if the labor markets are strengthened, with the1
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adjustment of monetary policies, then the economic activity is expanded, feeding the labormarket. The information is deduced, and it is decided by the committee to maintain one-fourth to half ofthe percent of the rate of funds. The economic conditions will be assessed by the Committee so that the size and the time ofadjustment of the rate of reserve can be determined. Other information will be considered forimprovements in the finances, the condition of the market of labor and the inflation pressures.For restoring the margin of inflation to 2%, the developments will be monitored by thecommittee for reaching the goal of inflation. Meeting Minutes of FOMCIn the recent discussion, there was a discussion about the financial stability and the monetarypolicies. A presentation was made in which the differences in the two subjects were highlighted,and it was shown that how the monetary policies react to the financial imbalances. There was anote drafted that mentioned the ability of financial markets to take the shocks as a result of thestrong economic policies that were implemented at the time of financial crisis. It was alsodiscovered by the Committee that the use of monetary policies might not be very beneficial andmay be outweighed by the cost of deviating from the price stability, which is the usual method. There were discussions on the matter of financial markets and OMO. The information came tothe Committee from the System Open Market Account manager about the developments of thefinancial markets. Then there were other reports too that informed about the OMO that wascarried out since March'15-March'16. 2
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