Fed Chairwoman Janet Yellen had indicated earlier this year that the FOMC should
ID: 2778712 • Letter: F
Question
Fed Chairwoman Janet Yellen had indicated earlier this year that the FOMC should start to raise the rate this year. The FOMC can do so either at the October meeting or at the December meeting.
(a) Do you expect that the FOMC will raise the federal funds rate at the meeting? Explain.
(b) If you were a FOMC voting member, what will be your recommendations for the monetary policy at the meeting and why?
(c) At the September meeting, Jeffrey M. Lacker, dissented by voting for a 25 basis points increase. Do you expect more or less dissenters for the October meetings? Explain.
(d) Do you think that the FOMC communicate clearly the monetary policy action to the public?
Explanation / Answer
I have summarized a WSJ article here. Please go through it and then read my views about your questions.
a. FOMC will not raise rates. Reasons explained above.
b. If I am the member of FOMC, I would vote for not raising interest rates in October, and wait for the economy recovery and then raise rates may be in December.
c. I think October meeting will be on the same lines as in the September meeting.
d. Yes it do. Reasons explained above.
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