Question

What is the current macroeconomic situation in the U.S.? What should the Fed do about it? What monetary policy tools should the Fed use to achieve the result(s) you just recommended?

Answer 1

The current Macroeconomic situation of the US suggests that, there has been ever rising NPAs in the banking sector of the country. What's worse is that, these business hiccups are even influencing world trade as well. even India's NPAs are on the rise, but, the rate of growth of NPAs of USA exceeds that of India's. Hence, the possible solution with the Fed is to curb out these unproductive lendings. The probable measure here would be to raise the lending interest rates and make lendings more expensive so that fresh withdrawls from the banking sector could be checked to a certain extent.