Monetary Policy

The Federal Reserve Monetary Policy

Beginning in 2001 there was extra attention and American plus global eyes on the Federal Reserve, one often heard, ‘the Feds are lowering interest rates again’ but what does that really mean? In recent memory, 2001 had the greatest impact on the economy due to the events of September 11th and the consequential impact on virtually every branch of the U.S industry and global economy. According to the official website for the Federal Reserve, “the Federal Reserve sets the nation’s monetary policy to promote the objectives of maximum employment, stable prices, and moderate long-term interest rates. The challenge for policy makers is that tensions among the goals can arise in the short run and that information about the economy becomes available only with a lag and may be imperfect.” (Anonymous 2005) Thus adjustments made to stabilize or regulate the economy slowly impact the economy and there may even be resulting readjustments necessary in order to meet the intended goal. The Feds as the agency is affectionately called, influence economy greater than all the areas, which play into the economic, bottom-line of U.S. monetary policy. The Feds in a sense stir the pot of soup when it is necessary to bring varying ingredient up to the top in order to stimulate better