Get off the zero bound and start raising interest rates

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We have been discussing all semester about when and if the Fed is going to get off the zero bound and start raising interest rates (aka, the exit strategy). In fact, it appears quite likely that the Fed will get off the zero bound at after their 2 day meeting Dec. 15 and Dec 16. a) Of course policy moves have been quite uncertain as of late and we have quite a bit of data that will available before the December meeting. Please give me two real world examples of incoming economic data between now and the next FOMC meeting that would increase the probability of the Fed getting off the zero bound. Now give two real world examples of incoming economic data that would lower the probability of the FOMC getting off the zero bound. Be very clear as to what the Fed is most concerned about and why - also be sure to mention the dual mandate and what part of the dual mandate are they most worried about? b) In class we watched a WSJ clip explaining how the new tools of the Fed will work when the Fed decides to get off the zero bound. Pretend that you are the Chair of the FOMC and you were in charge of writing the statement that is highly anticipated. Following the WSJ clip, what would the statement change exactly? Make sure you refer to the new tools.

Reference no: EM131094796

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