Monetary policy

On December 16th, 2015, FEDdecided to raise first time the record low target rate of federal reserve fund from 1/4% to 1/2%. On December 14th, 2016, Fed decided to raise the second time the federal fund rate from 1/2% to 3/4%.

On March 15th, 2017, Fed decided to raise the federal fund rate from 3/4% to 1%.

On June 14th, 2017, Fed decided to raise the federal fund rate from 1% to 1.25%.

OnDecember 13th, 2017, Fed decided to raise the federal fund rate from 1.25% to 1.5%.

On March 21st, 2018, Fed decided toraise the federal fund rate from 1.5% to 1.75%.

On June 13th, 2018, Fed decided to raise the federal fund rate from 1.75% to 2%.

On September 26th, 2018, Fed decided to raise the federal fund rate from 2% to 2.25%.

On December 19th, 2018, Fed decided to raise the federal fund rate from 2.25% to 2.5%.

On July 31st, 2019, Fed decided to cut the federal fund rate from 2.5% to 2.25%.

On September 18th, 2019, Fed decided to cut the federal fund rate from 2.25% to 2%.

On October 30th, 2019, Fed decided to cut the federal fund rate from 2% to 1.75%.

On March 3rd, 2020, Fed decided to cut the federal fund rate from 1.75% to 1.25% due to economic concern from coronavirus.

On April 29th, 2020, Fed decided to cut the federal fund rate from 1.25% to 0.25% due to economic concern from coronavirus.

Fed agrees that economic recovery is weak due to Covid, Also Fed feels that the job market is slowly strengthening, but the inflation signs is picking up. Although Fed feel it is necessary to maintain such accommodating easy monetary policy including very low interest rate until the unemployment improves further and inflation rate goes up to 2.0%, Fed started tapering easy monetary policy such as QE (quantitative easy) policy and expect the rate hike in 2022.

1) What's your opinion about the Fed policy decision by next FOMC meeting? (0.5 point)

2) Do you feel that thisnear zero interest wasnecessaryone, or may not work to save declining economy , due to liquidity trap? or can we be back in double dip recession due to too early exit strategy by the FED's tight monetary policy? (0.5 point)

3) Are you concerned about the inflation come back due to such easy monetary policy with zero interest rate for long time? if so, how fast isthe Fed supposedtotightenits monetary policy as an normalizing strategy?(0.5 point)

4) Will the new president's proposal of spending increase on infrastructure with excessive liquidity of easy Monetary policy may overheat US economy to be inflationary, due to supply chain bottlenecks? Will it be a sustaining inflation due to rising wage and rising raw material cost such as energy cost? if so, will it cause Fed to speed up the rate hike? If Tariff over trade and possible retaliation could be inflationary, does it give another incentive for Fed to speed the rate hike? or do you think Protective trade policy can contribute to prevent the overheating economy?(0.5 point) 5) Is there any risk that tight Fed policy may put US economy back into another recession, if tight Fed policy is ahead of curve , although it is gradual tightening? Do you think US will be in recession the this year(Year 2022 )? Yes or No. Can You predict how many times Fed will raise FFR(federal fund rate) in 2022 ? (0.5 point)

Go to the Fed web site(http://www.federalreserve.gov(Links to an external site.)) to find the Press Release under monetary policy.