Monetary Policy tonight.Bernanke is taking flack for being reactive. Being Fed chairman isn’t easy to do well. On the other hand, if your job is to juggle knives while riding around on a unicycle, it’s not unfair to criticize you for dropping one. Just because I can’t do it doesn’t mean I have to cut YOU a break.
Dollar is weak right now.
The Fed is required by law to testify to Congress twice a year. Currently February and August.
Currently we’re seeing 3.5% inflation. This is largely the result of rises in energy costs and food costs.
Monetary policy deals with the amount of money and credit in the country. It’s the responsibility of the Fed.
The Federal Reserve System was created in 1913 following financial panics and economic depressions. Particularly the banking panic of 1907. The 1907 panic was the fourth panic in 34 years.
Goals and roles of the Fed today are broad.
- Stable Prices
- Full Employment
- Economic Growth
- Regulate Banks