Fed Policy to Revive Ailing Economy
The Federal Reserve will continue to discuss solutions on how to revive the ailing economy which is still reeling from the credit-crunch and financial meltdown. One solution policy-makers have come up is by lowering interest rate almost to zero.
With this strategy, Fed is expecting that businesses will maximize its production, thus, boosting the economy.
The Federal Reserve will meet today to discuss monetary policy which can boost economic activity and cushion the impact of recession.
Earlier, policymakers have decided to drastically lower the interest rate to nearly zero in an attempt to lure businesses to maximize its productivity which in turn can boost economic activity.
With over $2 trillion to fund this policy tool, Fed assured companies and investors that the almost-zero interest rate will be implemented for a long period of time.
Some experts said the policymakers will target zero to 0.25 percent interest rate for borrowing, a measure which has already been discussed for previous months.
As the country is reeling from the impact caused by financial meltdown triggered by the ignominious downfall of the housing industry, Fed is trying to come up with the best solution to save the economy from succumbing to deep recession.
Meanwhile, the Fed also considers other unconventional tools which can revive the economy such as resorting to major purchases and backup government securities.
The global economic crisis started in September last year in US as large financial institutions and housing market simultaneously collapsed.
Few days ago, President Barack Obama’s proposed stimulus bill reached nearly $1 trillion.
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