1. Is the Fed worried about economic growth, unemployment, and inflation?
2. Based on your answer, what should the Fed do?
3. In its October 24, 2012, announcement, how did the FOMC characterize the rate of economic growth since its September meeting?
4. What is the current target federal funds rate, as of October 24, 2012?
5. What decision did the Fed make regarding the federal funds rate?
6. How does the Fed control the federal funds rate?
7. What kind of open market operations is the Fed engaged in?
EC 102 Fall 2012 Assignment 9 Board of Governors of the Federal Reserve System Press Release Release Date: October 24, 2012 For immediate release Information received since the Federal Open Market Committee met in September suggests that economic activity has continued to expand at a moderate pace in recent months. Growth in employment has been slow, and the unemployment rate remains elevated. Household spending has advanced a bit more quickly, but growth in business fixed investment has slowed. The housing sector has shown some further signs of improvement, albeit from a depressed level. Inflation recently picked up somewhat, reflecting higher energy prices. Longer-term inflation expectations have remained stable. Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee remains concerned that, without sufficient policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions. Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee also anticipates that inflation over the medium term likely would run at or below its 2 percent objective. To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee will continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month. The Committee also will continue through the end of the year its program to extend the average maturity of its holdings of Treasury securities, and it is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed  securities in agency mortgage-backed securities. These actions, which together will increase the Committee’s holdings of longer-term securities by about $85 billion each month through...
Already registered? Login
Not Account? Sign up
Enter your email address to reset your password
Back to Login? Click here