Question

- What is the result of the most recent Federal Reserve change in Monetary policy? Has it helped or hurt the Economy

Answer 1

The most recent Federal Reserve change in monetary policy happened in the month of December when the FEd increased the interest rates, and with a rising US economy and Economies around the world, the FEd rates are expected to increase further in the coming year i.e 4 times in the year 2018.

In the short term, it has made the borrowing difficult for the corporates and will reduce some demand also. But keeping into account the increasing inflation it was a necessary step. It will help stabilize the price rise in the US economy and keep the demand stable in the long run. Considering the fact that this all is coming after a decade of zero or near zero interest rates it will help economy gain a sustainable momentum and it is beneficial.