Project 2: What Was The FOMC's Rationale For Taking These Actions?
The Federal Open Market Committee (FOMC) meets on October 31-Nov 1 this fall. For each of these meetings the student submits the following information typed (Double spaced, Times New Roman, Justified alignment) in one page or less
1. Summarize the action(s), if any, taken by the FOMC. (i.e. investment purchasing, monitoring of the federal funds rate, etc.) – paragraph 1
2. Explain in your analysis:
a. What was the FOMC's rationale for taking these actions? – paragraph 2
b. What was the immediate effect of the announcement on the following economic indicators and your opinion on why this effect happened: - paragraph 3
i. Dow Jones Industrial Average
ii. Interest Rates
1. 3-month Treasury Bill Yield
2. 10-year Treasury Note Yield
Important notes: Each assignment either needs a paper copy to be brought to class or placed under my door at the office. No emails. Do not plagiarize another student's paper or the FOMC statement or I will report you to judicial affairs. The DJIA average and the treasury securities should be the previous day's closing price/rate and the closing price/rate on the day of the FOMC announcement. (i.e. the announcement is usually at 1 p.m. CST on the second day of the meeting).
Course
Tutor
Date
FOMC Statement from Oct 31-Nov 1 Meeting
Based on the statutory mandate of the FOMC, the committee is focused on fostering increased employment and price stability in the country. Nevertheless, the impact of the hurricane-related disruptions will have an impact on the economic growth, employment, and inflation. The FOMC notes that based on past experiences, the impact of the hurricane might not have a great impact on the national economy in the medium term (Reuters).
The rationale for these decisions is based on the expectation by the FOMC that gradual adjustments in the monetary policy and economic development will occur at a moderate pace. Subsequently, the labor conditions can strengthen, increasing efficiency that will lead to increased employment and price stability. Additionally, the inflation on an annual basis is expected to remain approximately below two percent in the new future and will stabilize at the two percent objective of the committee in the medium term. The decision was also made with considerations that the near-term risks to ...