Wall Street Journal Article Analysis

The federal reserve has raised interest rates five times in less then twelve months, and the pervious raises are just barely beginning to take effect. The previous raises averaged around a quarter percentage point, and since these raises failed to slow the economy, Greenspan, unable to take anymore chances doubled the previous with a promise of more to come.

QE3 began in September of 2012 with a gross domestic product increasing by 4.5%, which is an impressive gain over the previous years of very little growth, GDP currently, has had a relatively steady increase over each quarter amounting to 3.9% for the most recent data. However, while GDP is of serious concern, inflation and unemployment rates have not been so easily persuaded. According the Bureau of Labor Statistics (1), in September 2013 unemployment was in a downswing but still resided at 7.2%, much higher than the Feds target rate of 5%. Currently unemployment is at 5.8% which is within the realm of the Fed’s goal. Inflation has

Over the past decade, the Fed has responded fairly to inflation and unemployment. According to the Federal Reserve (2017), between late 2008 (the era of the Great Recession) and October 2014, the Federal Reserve purchased longer-term mortgage-backed securities and notes issued by certain government-sponsored enterprises, as well as longer-term Treasury bonds and notes. In essence, lowering the level of longer-term interest rates and improving financial conditions (the Fed.com, 2017).

If Janet Yellen, the Federal Reserve President is planning on raising the interest rates the US Federal Reserve will have to deal with the negative effects on economic growth, unemployment, wages, the prices of goods and services, and government spending. The effect on economical growth will be how much individuals would borrow to increase their spending. Over time the money individuals took and have to payback would increase. Thus, leading to debt by how much money they owe back. By increasing the amount individuals have to borrow it will lead to more unemployment. The need of consumption will decrease and that put more and more people out of jobs. Scarcity is always going to exist but a low demand will cause supply to be low and price be

The Federal Reserve raised the Federal Funds Rate on December 16, 2015 and economists are arguing whether the move was right or not. This is the first time the Fed increased the rate in almost a decade. As usual, there are lots of pros and cons after the new policy was announced. Some economists agree with the move, while others maintain their position that it is still too early to decide.

Saying that the the interest rates will increase at a slower pace is a very broad statement and it is very difficult to predict what the FOMC is thinking. This speech shed some light on this issue. Janet Yellen gave the U.S. economy the committee's numeric expectations.

The first thing that stuck out to me while reading about what the Fed rate hike means is that “the central bank now believes the U.S. economy is strong now and no longer needs crutches.” I really don’t see how anyone could legitimately think the economy is strong, given that we’re almost twenty trillion dollars in debt, and it continues to grow. I think it is good that raising the interest rates will result in higher interest payments for people just saving money in the banks. I think this might motivate people to save their money more and spend it with a higher degree of care. I also think that Donald Trump likes that the Fed increased the interest rate because it will make it harder for companies to sell their products globally. An increase

The Chairman of the Federal Open Market Committee (FOMC), William Dudley, appeared last week to virtually rule out any chance of an increase in the federal funds target at the 16-17 September policy meeting. As President of the Federal Reserve Bank of New York, he is probably the best qualified member of the FOMC to understand the implications of tightening US financial conditions. That having been said, Mr Dudley was careful not to entirely rule out the case for normalisation, depending on incoming information about the state of the economy. Given the short time horizon between now and the next policy meeting, it would seemingly require significantly stronger-than-expected data to bring September back onto the table as a plausible launching point for a higher policy rate. Meanwhile, Fed Vice Chairman Fischer asserted last Friday that September still remains an option to raise the federal funds rate and that the fallout from China is being assessed. He believes that the direct economic impact from a slowing Chinese economy on the US is modest and that the domestic economic backdrop continues to normalise. This would, therefore, be conducive with a more conventional policy stance at some future point.

The main purpose of this article is to analyze the current policy of Fed and to discuss how the New Fed Chairman Janet Yellen will deal with current policy of Quantitative Easing. The article analyzes the impact that policy had and what Janet Yellen`s exit strategy is in light of current FED intervention in economy.

The fast approaching US Christmas shopping season is always a convenient juncture to review the baseline outlook for the economy and, therefore, monetary policy over the next year. Meanwhile, Congress appears to be busy formulating tax reform proposals that will ultimately be resolved by a Conference Compromise Agreement. President Trump appears keen to get tax reform passed by the end of 2017. Consequently, incoming Fed Chairman Powell may be forced to forge an appropriate monetary offset in 2018.

The Chairman of the Federal Open Market Committee (FOMC), William Dudley, appeared last week to virtually rule out any chance of an increase in the federal funds target at the 16-17 September policy meeting. As President of the Federal Reserve Bank of New York, he is probably the best qualified member of the FOMC to understand the implications of tightening US financial conditions. That having been said, Mr Dudley was careful not to entirely rule out the case for normalisation, depending on incoming information about the state of the economy. Given the short time horizon between now and the next policy meeting, however, it would seemingly require significantly stronger-than-expected data to

The weaker-than-expected Employment Situation report for August was generally pleasing news for financial markets. Importantly, it seemed to confirm the continuation a slow growth economic equilibrium, characterised by low levels of unemployment and inflation. The short-term implication for financial markets is that the report makes it highly unlikely that the Federal Open Market Committee (FOMC) will embrace a more hawkish posture. Meanwhile, any continuation of similar reports in subsequent months will raise the ante between those FOMC members who are concerned about low inflation and those who fret about potential financial instability.

The Fed has put into place an extraordinary amount of monetary accommodation over the past few years. Continued declines in the unemployment rate are expected, but there are a number of FOMC members who are wary that the Fed could be caught badly behind the curve in terms of removing this accommodation once unemployment nears its natural rate (just below 6%). In order to prevent this risk, tapering asset purchases makes perfect sense, even though the Fed remains some way off from achieving its dual mandate. Under current circumstances, the Fed can be said to possess a so-called hawkish reaction

The minutes to the 28-29 July Federal Open Market Committee (FOMC) meeting offered virtually zero fresh information about policy conduct. Market events have subsequently overtaken investors’ attention. In fairness, however, there was a reference to overseas events and their potential to suppress inflation. Recent currency movements have suggested that the race to the bottom has intensified. Furthermore, US financial conditions, although still very loose, have been tightening recently, but we are still in easier territory than during the infamous taper tantrum. The FOMC will, therefore, keep a close eye on the behaviour of the monetary backdrop as we approach the potentially critical 16-17

Following the surge in stock indexes, the Federal Reserve raised interest rates. Before they official rose rates, there were many statements from officials about a strong possibility that interest rates would rise. This