The Federal Open Market Committee's (FOMC) words are indeed starting to carry as much weight as its actions when it comes to setting monetary policy during the pandemic. This was because the FOMC was more flexible about monetary policy during the epidemic, which made it easier for it to be put into action in a way that worked better. The statement from the FOMC has become more and more important as the pandemic has gone on. This is so the FOMC can find a good mix between helping the economy and keeping the financial system safe. By making its goals and policy factors clear, the FOMC has made sure that its policies are more effective at reaching these goals. For example, the FOMC told the market that it planned to keep interest rates low to stimulate the economy (Farnham, 2014). Investors now have more faith in the FOMC's promise because there are signs that the economy will grow. In its messaging, the FOMC also talks about the big picture of policy and the goals of monetary policy. This means that the FOMC's actions can be checked to make sure they are in line with its stated policy goals.

How well the FOMC can interact during a pandemic will affect how well it can respond to changes in the economy. The FOMC uses its messages to tell the market what to do in case of a financial shock like the COVID-19 epidemic. By giving this guidance, the FOMC can make sure that its policies can respond better to changes in the economy. Overall, it is clear that how well the FOMC told the public about the spread affected its ability to make good decisions about monetary policy. In its statement, the FOMC said it was still committed to keeping interest rates low, laid out its policy goals, and gave advice on how to deal with economic changes. The FOMC does this to make it more likely that it will be able to achieve its policy goals. People might say that the FOMC's words about how to handle monetary policy during the pandemic are just as important as what it does.

Given the present economic condition and trends, evaluate how effectively the Fed promotes economic stability.

The Federal Reserve (Fed) is in charge of keeping the economy stable, and it has several ways to do this. By changing the federal funds rate, which is the price at which banks lend to each other overnight, the Federal Reserve can change how the economy works. All other interest rates, like credit card and mortgage rates, are based on this rate. By changing the federal funds rate, the Fed can affect how much money people and businesses borrow, how much they spend, and how much money the government needs to borrow.

By buying and selling Treasuries, the Fed can bring down the amount of money in circulation. This move directly affects the value of debt and can be used to slow down inflation. With discount windows, the Fed can give direct loans to banks that are having trouble. So, the amount of money grows, and the business may be boosted. Also, Farnham (2014) says that the Fed has the power to control and run the economy. The Fed makes rules that banks have to follow, and it keeps an eye on the banking system to make sure it works well. This makes the economy more stable and reduces overall risk.

How well the Fed helps keep the economy stable depends a lot on how the economy is doing and where it is going. When the economy is safe and growing, the Fed can use its tools to keep things the same. But if there is a financial crisis or recession, the Fed might need to move with more force. During the 2008 financial crisis, for example, the Fed took a more aggressive approach by lowering the federal funds rate to almost 0% and boosting the amount of money in circulation by buying a lot of Treasuries. The Fed has shown that it can handle financial crises, and what it does can help lower systemic risk and make the economy more stable. The Fed has a lot of tools it can use to make the economy more stable, and how well they work relies on the situation and direction of the economy.

he topic of your discussion response should be your classmates posting and should be written as if you were reviewing his/her posting in an academic journal. Your discussion response should, therefore, answer the following questions as applicable:

1. Were your classmates arguments articulate and logical? Were the facts correct?
2. Was the interpretation your classmate provided reasonable and consistent with experts in the field? Was your classmate consistent with both the substance and intent of his/her references?

The focus for your critical analysis is not whether or not you agree with your classmate, but how well his/her position was presented. Each response should be at least 200 words in length and cite two academic sources.