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Inflation and full-employment targets

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Reference no: EM131424219

The FED has only increased the interest rate, the discount rate, twice since the 2007/08 recession.  The FED is has cautiously increased the Federal Funds Rate. The Federal Funds Rate has been kept very, very, very low for a very long time and the FED made a very small increase.  The question now is will they push the rate up a bit more.  We don't know but you can check on the thinking via posted information each month by the FOMC.  The other question is will they make yet another increase in the discount rate.  Again, we can find out what the FED is thinking.  The FED Chair reports to congress twice annually and more frequently when asked.

  • According to the FED what are it's inflation and full-employment targets.
  • Explain how changes in the money supply via the open market operation impact will raise interest rates and how the anticipated increase in interest rates will likely effect, GDP and employment.

Reference no: EM131424219

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