During an unscheduled meeting on March 15, 2020, the Fed's Federal Open Market Committee announced it would
Question:
During an unscheduled meeting on March 15, 2020, the Fed's Federal Open Market Committee announced it would lower its benchmark interest rate (the federal funds rate) to near zero percent. These are what we call "monetary policies" which differ from "fiscal policies".
- Why are the Fed's announcements such a big deal?
- Why would the Fed act to lower interest rates to near zero?
Much of the response to COVID was fiscal in nature.Dig to determine what impact the Fed's "monetary policy prescriptions" had on the economy during the pandemic crisis. Be careful to distinguish between the fiscal and the monetary policies.
- What additional measures has the Fed announced since March, 2020, to mitigate the effects of coronavirus on our economy?
POST - COVID, the Fed has been fighting another battle in the economy. What are they fighting? What policies have they enacted to help the economy get back onto a 'healthier' path? Any thoughts on whether the knee jerk pandemic responses may or may not have exacerbated the issue they are now fighting? (in other words, did they help create the monster they are now fighting?)
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Expert Answer:
The Feds announcements are significant because they signal its stance on monetary policy which influences borrowing costs investment decisions and ove... View the full answer
