•Learners
are to research the current value and the expected future changes in the
following economic indicators:
· GDP and the rate of GDP growth
· Measures of inflation and consumer prices
· Level of money supply growth
· Discount rate
· Federal funds rate
· Measures of employment and the unemployment rate
· Investment spending by the private sector
· U.S. trade balance
· Value of the dollar on foreign currency markets
· Housing starts
· Retail sales
· Consumer confidence
· S&P 500 Stock Index
· Other variables you believe to be important
Assume your group represents the Federal Open Market Committee (FOMC) and is
making a case to the Senate Banking Committee regarding the future direction of
monetary policy. Based on your research, develop a PowerPoint presentation
(10-12 slides) that addresses each area below. Your discussion should be based
on the economic data found above. The economic data required for this
assignment can be found on the Federal Reserve Economic Data (FRED) website,
which is maintained by the Federal Reserve Bank of St. Louis athttp://research.stlouisfed.org/.
Be sure your presentation addresses the following:
1. Review the statistics above. Do not merely cite numbers and values, but
identify trends, relationships between the variables, and the significance of
each factor in enabling or hindering the Fed from meeting its twin policy goals
of promoting full employment and minimizing inflation.
2. Identify and discuss expectations of changes in economic, financial, and
international conditions in the near future.
3. From your analysis, identify the three most significant economic problems we
currently confront. Also, identify the role monetary policy could play (if any)
in resolving these problems.
Identify whether the Fed should continue its current pace of security
purchases, and indicate what “forward guidance” the Fed should issue now and
why? Be specific in answering the
1. question. Forward guidance is the specific language the Fed uses to indicate
the direction and extent of their future policy action.
2. Recommend whether the FOMC should rise, lower, or keep short-term interest
rates (the federal funds rate) the same. Support your recommendations with your
research findings.
