Federal Reserve Paper

Federal Reserve Paper Alex Layer Macroeconomics On October 23 and 24 the Federal Reserve Open Market military commission held a meeting to discuss what they need to do or lead to do to puddle the economy. check to the statement consumer spending has add-ond, but investing in companies has continued to decrease. They also said that inflation has increased which causes thrust costs to go up, but the expectations be looking good. The Fed trenchant that continuing to buy securities would be a good idea since they be trying to lower the long-term stakes rates.Their plan is to continue acquire these mortgage backed securities until the labor markets improve. They will also plan on purchasing more assets if that is the case. The direction wants to continue extending the holding of Treasury securities, and it is belongings the policy of reinvesting principal payments from the holding of agency debt and agency mortgage-backed securities. Their goal by doing this is to keep the Fe deral funds rate between 0 and . 25%. All of this will increase securities held in the long run. They influence the interest rates by buying securities through open market operations.The committee decided that the economy is getting better but too slowly so that is why they decided to take these actions to try and increase the speed. According to The New York Times article , they want to max out exercising and price stability, which will help stimulate the economy. After reading the Committees statement I have concluded that they are development expansionary policies or easy money policies. I figured they are doing this since they are buying and holding their securities in an attempt to raise the aggregate demand.I do agree with what the Fed is planning to do in an attempt to stimulate the economy. I this it is a good idea since our economy is still in somewhat of a slump to use the easy money policies to increase the aggregate demand by changing the interest rates. Overall I agr ee with what they plan to do seeing that it should give us a positive outlook on the economy in the time to come. Sources http//www. nytimes. com/2012/10/25/business/economy/fed-affirms-low-rates-and-sees-moderate-growth. html? hp&_r=1& http//www. federalreserve. gov/newsevents/ fix/monetary/20121024a. htm