1) What's your opinion about the Fed policy decision by next FOMC meeting? To boost economy,...

  
 

Transcribed Image Text:

1) What's your opinion about the Fed policy decision by next FOMC meeting? To boost economy, is it a good or bad idea of negative interest rate policy? (0.5 point) 2) Do you feel that this near zero interest was necessary one, or may not work to save declining economy, due to liquidity trap? or can we be back in double dip recession due to too early exit strategy by the FED's tight monetary policy? (0.5 point) 3) Are you concerned about the inflation come back due to such easy monetary policy with zero interest rate for long time? if so, how fast is the Fed supposed to tighten its monetary policy as an normalizing strategy? (0.5 point) 4) Will the new president's proposal of spending increase on infrastructure may overheat US economy to be inflationary? if so, will it cause Fed to speed up the rate hike? If Tariff over trade and possible retaliation could be inflationary, does it give another incentive for Fed to speed the rate hike? or do you think Protective trade policy can contribute to prevent the overheating economy? (0.5 point) 5) Is there any risk that tight Fed policy may put US economy back into another recession, if tight Fed policy is ahead of curve, although it is gradual tightening? Do you think US will be in recession the this year (Year 2021 )? Yes or No. Can You predict how many times Fed will raise FFR (federal fund rate) this year? or how many times FED will cut FFR due to trade issues and global slow- down? (0.5 point) Monetary policy On December 16th, 2015, FED decided to raise first time the record low target rate of federal reserve fund from 1/4% to 1/2%. On December 14th, 2016, Fed decided to raise the second time the federal fund rate from 1/2% to 3/4%. On March 15th, 2017, Fed decided to raise the federal fund rate from 3/4% to 1%. On June 14th, 2017, Fed decided to raise the federal fund rate from 1% to 1.25%. On December 13th, 2017, Fed decided to raise the federal fund rate from 1.25% to 1.5%. On March 21st, 2018, Fed decided to raise the federal fund rate from 1.5% to 1.75%. On June 13th, 2018, Fed decided to raise the federal fund rate from 1.75% to 2%. On September 26th, 2018, Fed decided to raise the federal fund rate from 2% to 2.25%. On December 19th, 2018, Fed decided to raise the federal fund rate from 2.25% to 2.5%. On July 31st, 2019, Fed decided to cut the federal fund rate from 2.5% to 2.25%. On September 18th, 2019, Fed decided to cut the On July 31st, 2019, Fed decided to cut the federal fund rate from 2.5% to 2.25%. On September 18th, 2019, Fed decided to cut the federal fund rate from 2.25% to 2%. On October 30th, 2019, Fed decided to cut the federal fund rate from 2% to 1.75%. On March 3rd, 2020, Fed decided to cut the federal fund rate from 1.75% to 1.25% due to economic concern from coronavirus. On April 29th, 2020, Fed decided to cut the federal fund rate from 1.25% to 0.25% due to economic concern from coronavirus. Fed agrees that economic recovery is weak due to Covid, Also Fed feels that the job market is slowly strengthening, but the long term inflation signs still stabilized. Now Fed feel it is necessary to maintain such accommodating easy monetary policy including very low interest rate until the unemployment improves further and inflation rate goes up to 2.0%. Fed decided that the size of the mortgage bond purchase as QE policy was winding down on October 2014 as the economy continues to improve, but due to coronavirus, Fed reopened QE policy. 1) What's your opinion about the Fed policy decision by next FOMC meeting? To boost economy, is it a good or bad idea of negative interest rate policy? (0.5 point) 2) Do you feel that this near zero interest was necessary one, or may not work to save declining economy, due to liquidity trap? or can we be back in double dip recession due to too early exit strategy by the FED's tight monetary policy? (0.5 point) 3) Are you concerned about the inflation come back due to such easy monetary policy with zero interest rate for long time? if so, how fast is the Fed supposed to tighten its monetary policy as an normalizing strategy? (0.5 point) 4) Will the new president's proposal of spending increase on infrastructure may overheat US economy to be inflationary? if so, will it cause Fed to speed up the rate hike? If Tariff over trade and possible retaliation could be inflationary, does it give another incentive for Fed to speed the rate hike? or do you think Protective trade policy can contribute to prevent the overheating economy? (0.5 point) 5) Is there any risk that tight Fed policy may put US economy back into another recession, if tight Fed policy is ahead of curve, although it is gradual tightening? Do you think US will be in recession the this year (Year 2021 )? Yes or No. Can You predict how many times Fed will raise FFR (federal fund rate) this year? or how many times FED will cut FFR due to trade issues and global slow- down? (0.5 point) Monetary policy On December 16th, 2015, FED decided to raise first time the record low target rate of federal reserve fund from 1/4% to 1/2%. On December 14th, 2016, Fed decided to raise the second time the federal fund rate from 1/2% to 3/4%. On March 15th, 2017, Fed decided to raise the federal fund rate from 3/4% to 1%. On June 14th, 2017, Fed decided to raise the federal fund rate from 1% to 1.25%. On December 13th, 2017, Fed decided to raise the federal fund rate from 1.25% to 1.5%. On March 21st, 2018, Fed decided to raise the federal fund rate from 1.5% to 1.75%. On June 13th, 2018, Fed decided to raise the federal fund rate from 1.75% to 2%. On September 26th, 2018, Fed decided to raise the federal fund rate from 2% to 2.25%. On December 19th, 2018, Fed decided to raise the federal fund rate from 2.25% to 2.5%. On July 31st, 2019, Fed decided to cut the federal fund rate from 2.5% to 2.25%. On September 18th, 2019, Fed decided to cut the On July 31st, 2019, Fed decided to cut the federal fund rate from 2.5% to 2.25%. On September 18th, 2019, Fed decided to cut the federal fund rate from 2.25% to 2%. On October 30th, 2019, Fed decided to cut the federal fund rate from 2% to 1.75%. On March 3rd, 2020, Fed decided to cut the federal fund rate from 1.75% to 1.25% due to economic concern from coronavirus. On April 29th, 2020, Fed decided to cut the federal fund rate from 1.25% to 0.25% due to economic concern from coronavirus. Fed agrees that economic recovery is weak due to Covid, Also Fed feels that the job market is slowly strengthening, but the long term inflation signs still stabilized. Now Fed feel it is necessary to maintain such accommodating easy monetary policy including very low interest rate until the unemployment improves further and inflation rate goes up to 2.0%. Fed decided that the size of the mortgage bond purchase as QE policy was winding down on October 2014 as the economy continues to improve, but due to coronavirus, Fed reopened QE policy.

Answer rating: 100% (QA)

1The Fed s monetary policy decisions are meant to boost the economy Negative interest rate policy is ... View the full answer