Case: The U.S. Federal Reserve Chairwoman Janet Yellen does not increase interest rates. At the beginning of the semester the class had an assignment which was to look up Janet Yellen’s who is chairwoman of the U.S. Federal Reserve System announcement on whether or not she was going to keep the policy interest rates unchanged. She had decided then, not to change the policy interest rates because she feared risks of worst economic stand for the United States if there were any changes done at that time. She stated that not making changes until further progress in the labor market would result to the inflation rate going back to 2% by the year of 2018. Ever since this speech I followed Ms.Yellen online and kept a close look at further decisions
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This case falls under the monetary policy frame work. This case has to do with monetary policy because the FED’s most important function is to conduct monetary policy. Janet Yellen is the Federal Reserve chairwoman of the U.S. Janet Yellen is the head of the central banking System which decides on money supply to adjust interest rates to lower unemployment and inflation. She is the face of the FED; her job is to carry out the mandate of the Federal Reserve System. The Federal Reserve Systems main focus is to carry out the goals of maximum employment, stable prices, and moderate long term interest rates. Monetary policy involves managing interest rates and credit conditions, which influences the level of economic activity. Monetary Policy influences inflation and employment. By implementing effective monetary policy the FED can maintain stable prices, which results in more employment and long term economic growth. The FED’s has 3 traditional tools which are the open market operations which influences the supply of bank reserves. Reserve requirements is the second tool which are the portions of deposits that banks must maintain, and lastly discount rates which is the interest rate charged by the FED to depository institution on short term
This case falls under the monetary policy frame work. This case has to do with monetary policy because the FED’s most important function is to conduct monetary policy. Janet Yellen is the Federal Reserve chairwoman of the U.S. Janet Yellen is the head of the central banking System which decides on money supply to adjust interest rates to lower unemployment and inflation. She is the face of the FED; her job is to carry out the mandate of the Federal Reserve System. The Federal Reserve Systems main focus is to carry out the goals of maximum employment, stable prices, and moderate long term interest rates. Monetary policy involves managing interest rates and credit conditions, which influences the level of economic activity. Monetary Policy influences inflation and employment. By implementing effective monetary policy the FED can maintain stable prices, which results in more employment and long term economic growth. The FED’s has 3 traditional tools which are the open market operations which influences the supply of bank reserves. Reserve requirements is the second tool which are the portions of deposits that banks must maintain, and lastly discount rates which is the interest rate charged by the FED to depository institution on short term