1. Why is the New York Federal Reserve President always a voting member of the F
ID: 1118707 • Letter: 1
Question
1. Why is the New York Federal Reserve President always a voting member of the FOMC?
2. Go to https://www.federalreserve.gov/aboutthefed/structure-federal-reserve-system.htm and list the five functions stated by the Federal Reserve.
3. Go to https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm and click on the statement released after the most recent FOMC meeting. Summarize this statement in one paragraph. Be sure to note what the committee decided to do to the federal funds rate target. Now review the statements from the past two meetings. Has the stance of the committee changed?
Explanation / Answer
The participants discussed many issues including the current economic condition of the country in view of heavy cyclones in many provinces, financial situation,GDP growth rate, inflation and performance of manufacturing sector.During the last discussion, members reviewed the current labor market scenario in the country and rising prices of food items and energy fuels. Committee members also were of opinion that hurricanes will continue to affect the economic development, inflation and employment in the next quarter. The FOMC voting members voted that directs Desk to carry out open market operations in order to maintain Federal Funds at the rate of 1-1/4%.Committee also directs Desk to monitor the Federal Reserve’s holdings of Treasury Securities of $6 billion or more in each month. The statement released by the Committee revealed that employment prospects remains bright in spite of devastating cyclones in some provinces.Inflation of the food items though has shown an upsurging trend but considering inflationary measures on a 12-month basis, it still remains low at 2%.The Committee also emphasizes growth of employment and moderation of prices.Reviewing the statements from past two month’s meetings, it is obvious that there has been no change in the official stand of the Committee on the current economic development, employment generation, inflation and manufacturing growth.
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