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Please give a brief description of current Federal Reserve Policy and whether you agree or disagree with it and why?

Finance Jan 04, 2021

Please give a brief description of current Federal Reserve Policy and whether you agree or disagree with it and why?

Expert Solution

Current Federal Reserve monetary policy is about expansion in the economy and it is a highly expansionary policy which is focused about cutting off the interest rate in order to stimulate the demand to the economy, so it is a highly expansionary policy which is trying to counter the risk associated with the impending recession which had arised due to coronavirus so this is primarily a very low interest rate policy and low Reserve requirement policy which is Focus upon maximization of demand and stimulation of growth.

I donot agree with the current policy and I want that federalism should increase the interest rate because it has increased the debt on the books of account and it will be struggling to pay in the long run ,which can lead to a high risk related to default of various foreign asset and hence I believe that federal reserve should be working in best interest of the economy not the best interest of stock markets.

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