The Federal Reserve Act mandates that the Federal Reserve conduct monetary policy “so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.” Decisions about monetary policy are made at meetings of the Federal Open Market Committee (FOMC).
Write an essay of about 300-400 words about the current monetary policy pursued by the Fed. The essay should be written as a newspaper article. In this essay, make sure to address the following points:
- How do current interest rates compare to interest rates for the past years?
- What are the factors that affected the Fed’s decisions in 2022?
- What do you expect the Fed’s policy to be for the rest of the year in 2022 and 2023?
- What might be the implications of the changes in monetary policy in 2022?
- What do you expect to happen to the economy (e.g. GDP, unemployment, inflation, housing market) in the next few years?
You should give feedback of about 200 words to at least one of your colleagues. Your feedback should focus on your colleagues’ ideas, and ability to reflect on current economic events.
Learning outcomes: Students (i) learn to identify in real time the factors that affect monetary policy and decisions made by the Fed (ii) connect the theory learnt in class with current events (iii) improve their ability to communicate ideas in a clear, concise fashion
