monetary policy (4)

One of the Federal Reserve’s main jobs is to monitor and stimulate the economy of the US, to do so, the fed is using many tools, and these tools are forming the monetary policy, here are some of these tools.

1. Required reserve ratio:

This is the amount of deposit that banks has to keep with the fed. The fed is changing this amount corresponding the economy state. The fed is rarely changing this amount since it usually results in high cost incurred by the banks. Decreasing this amount would result

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Inflation Prevention with Monetary Policy

ECON 6644 - 02 

“Monetary policy is directly responsible for economic and financial stability”

This article discusses how central banks around world play the top role at controlling the economy’s life. They should know and see everything in order to properly act on it in a timely manner. Without this and proper monetary policies, a financial crisis is bound to happen. In the last major financial crisis, the US and EU were very affected. Both these countries monetary policies and central banks fail

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In a press conference on Tuesday, Fed Chair Janet Yellen said: "My colleagues and I may have misjudged the strength of the labor market, the degree to which longer-run inflation expectations are consistent with our inflation objective, or even the fundamental forces driving inflation." 

Read more below:

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Great read on current issues involving the Fed and its $4.6 trillion balance sheet.

Dick Bove, an equity research analyst at the Vertical Group, explains the problem with the Fed and how the Fed would be insolvent if it were judged as a private financial institution. Read more below:

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