The Story of the Federal Reserve System Part 3: The Balancing Act

  1. The job of making monetary policy often is a balancing act, as the Fed has to make sure that money and credit don’t grow either too slowly or too rapidly.
  2. While some recessions might result from monetary policy of the Fed, our current recession is mainly the result of the impacts of the COVID-19 global pandemic shock to labor productivity and consumer demand.
  3. The Fed is currently concerned that fiscal policy might be needed to inject more money into the economy since the Fed has already exhausted most of its ability to increase credit growth.


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