Fed's policy strategy
Read the attached and answer the following question.
Critically analyze the reasons for shifting Fed's policy strategy from being patient to not being patient in raising the interest rate from its current 45 year low. What would be the possible effect of raising the interest rate by the Fed, as expected to happen later this year, on investment, consumption, employment, output, and inflation?
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Hello,
The Fed must closely monitor present and near-term changes in the economy. If the Fed raises interest rates, it will be to prevent inflation from an economy that is growing too fast as determined by the 'experts'. If they guess wrong, a recovering economy may stumble. ...
Solution Summary
What would be the possible effect of raising the interest rate by the Fed, as expected to happen later this year, on investment, consumption, employment, output, and inflation?
The Fed must closely monitor present and near-term ..........