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The overall credit conditions have for example been severely affected by housing market and other economic trends. This has been exacerbated by energy and commodity price increases, which have affected household buying power negatively.
Concomitantly, the inflation rate has remained high at nearly 3.5% for the first five months of 2008. Chairman Bernanke also noted that the trend in rising prices was likely to further increase inflation. Furthermore, oil production has risen only slightly, despite sharp price increases. This indicates tighter government control over oil reserves.
The declining value of the dollar in foreign markets also seems to be a matter of concern for congress that both result from and in turn affect the volatility of oil prices. There does not seem to be a particular emphasis on any single aspect of inflation or the recession. Instead, the general consensus appears to be that all the elements within the economic system have some influence on both the recession and...
The Federal Open Market Committee have for example eased policy to mitigate downside risks to economic activity. Secondly, the Federal Reserve expanded some special liquidity programs to support financial markets and attempt to reestablish financial stability. Despite the positive effects of these actions, Chairman Bernanke however emphasized that additional actions may be necessary to address the effects of the declining housing market and rising energy prices.
Bibliography
Bernanke, Ben S. Testimony: Semiannual Monetary Policy Report to the Congress. Before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate. July 15, 2008. http://www.federalreserve.gov/newsevents/testimony/bernanke20080715a.htm
Bibliography
Bernanke, Ben S. Testimony: Semiannual Monetary Policy Report to the Congress. Before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate. July 15, 2008. http://www.federalreserve.gov/newsevents/testimony/bernanke20080715a.htm
This is the interest rate that banks lend their balances on at the Federal Reserve to other banks. It exercises this control by influencing the demand for and supply of these balances through the following means: Open market operations -- the purchase or sale of securities, primarily U.S. Treasury securities, in the open market to influence the level of balances that depository institutions hold at the Federal Reserve Banks (The
During most of the last 20 years (from August 1987 to January 2006), the Fed was headed by Alan Greenspan whose personal economic philosophy to a large extent guided the Fed's actions. One of the features of the Federal Reserve's "accommodative" policies was encouraging low interest rates, which was partly responsible for the longest period of economic expansion in U.S. history in the 1990s. Assessment of the Efficacy of the
The 12 Federal Reserve Banks are the private sector check and balance to the Federal Reserve. They have three primary roles: 1) To Establish and implement sound monetary policy, 2) To provide a number of financial services to banks (hence the term, Banker's bank -- loans, clearing house, etc.), and 3) The supervision of banks or bank holding companies (companies who own several banks). This system keeps the nation's banks
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