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Homework answers / question archive / what would you recommend to the Fed at its next FOMC meeting on December 15-16, 2020 if the U

what would you recommend to the Fed at its next FOMC meeting on December 15-16, 2020 if the U

Economics

what would you recommend to the Fed at its next FOMC meeting on December 15-16, 2020 if the U.S. unemployment rate fell from its current 6.9% rate to 6.1% and the U.S. annualized inflation rate increased from 2% to 2.2% in November 2020?

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As US economy is currently struggling under deflationary pressures due to coronavirus crisis and these greenshoots of reducing unemployment rate and increasing inflation will provide some sigh of relief. In this case I would recommend to keep status quo and rates unchanged so as to let economy strenghten further. Also I do not see inflationary risks in near term due to lack of demand in the economy therefore keeping status quo seems best.

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