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Easier Control of Interest Rates

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Recommend three policy changes that would make the Federal Reserve's job of controlling U.S. interest rates easier. Explain your reasoning.

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The solution explains three policy changes that would make the Federal Reserve's job of controlling U.S. interest rates easier.

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The appropriate level of interest rates will vary with the stance of fiscal policy, changes in the pattern of household and business spending, productivity growth, and economic developments abroad. It can be difficult not only to gauge the strength of these forces but also to translate them into a path for interest rates.

1. In order to ensure the stability of interest rates Federal Reserve can create a program of inflation targeting. This is an economic ...

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Umut Oltulu, MBA
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  • BSc, Dokuz Eylul University
  • MBA, Texas A&M University-Kingsville
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