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 timethe federal fund ratefrom 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 December 11th, 2019, Fed decided to maintain federal fund rate at 1.75%.

Fed agrees that economic recovery is still moderate,Also Fed feels that the job market isstrengtheningand the long term inflation signs stabilized.But Fed also feel it is not necessary to maintainsuch accommodatingeasy monetary policy includingvery low interest rate,Sincethe unemploymentcontinue to remain lowand inflation rate stays to remain near 2.0%.

Fed decided that the size of the mortgage bond purchase as QE policy was winding down on October 2014 as the economy continues to improve.

The future rate hike will be gradual, depending upon the upcoming economic indicators.

1) What's your opinion about the Fed policy decision by nextFOMC meeting? To boost economy, is it a good or badidea of negative interest rate policy?(0.5 point)

2) Do you feel thatthisnear zero interest wasnecessaryone, ormay not work to save declining economy , due to liquidity trap? orcan 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 annormalizing strategy?(0.5 point)

4)Will the new president's proposal of spending increase on infrastructure and defense as well as tax cut on corporate income tax and individual income taxmay overheat US economy to be inflationary? if so, will it cause Fed to speed up the rate hike?If Tariffover trade and possible retaliation could be inflationary, does it give another incentive for Fed to speed the rate hike?(0.5 point)

5) Is there any risk thattight Fed policy may put US economy back into another recession,if tight Fed policy is ahead of curve by overshooting it , although it is gradual tightening? Can You predict how many times Fed will raise or cutFFR(federal fund rate) this year ( due to global slowing down economy andprotective trade policy)?(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.