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Consider the existing economic conditions, including inflation and economic growth. Do you think the Fed should...

Consider the existing economic conditions, including inflation and economic growth. Do you think the Fed should increase interest rates, reduce interest rates, or leave interest rates at their present levels? Offer some logic and include references used to support your answer.

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Answer #1

Considering the existing economic conditions, including inflation and economic growth Fed should increase interest rates slightly to bring the inflation rate down and increase the economic growth as the current inflation rate of U.S. is 2.4 which have increased from the last few months due to the rising prices of various commodities. The increase in inflation means decrease in the purchasing power of money/dollar so to maintain the value of dollar and control the supply of money in the economy Fed should increase interest rate so that they can bring the inflation rate down. Inflation rate affects our growth rate also.

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