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Good afternoon. To reduce the money supply and raise interest rates, the Fed could increase the discount rate at which banks borrow money and reduce
Good afternoon. To reduce the money supply and raise interest rates, the Fed could increase the discount rate at which banks borrow money and reduce the liquidity of the overall system. The more it costs to borrow money means less is available in rotation. Given our current economy, I would recommend the Fed reduce the money supply and raise interest rates. Our economy is currently experiencing inflation at an astronomical rate. The effects of the Covid-19 pandemic are far-reaching where businesses were closed, stimulus checks were freely given, and a swath of new policy was enacted from a new political group. Unfortunately, the ripple will continue for many years I believe. In the meantime, the Fed should focus on managing inflation and brainstorm creative ways to balance economic growth and development. Reply to post
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