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U.S. Federal Reserve

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Should the U.S. Federal Reserve decrease interest rates at its next meeting? Why or why not?

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Solution Summary

This posting gives you a step-by-step explanation of the impact of Federal Reserve actions on US economy. The response also contains the sources used.

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The current US Federal Reserve target rate is 0-0.25%. This rate is very low. This low rate has been maintained to provide liquidity during the economic downturn. The reasoning was that the banks will lend to individuals and businesses at low rates of interest and this will stimulate economic activity. The US Federal Reserve should not further decrease the interest rate.

Further decreases in US ...

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