In five pages this paper discusses the recent Federal Reserve inaction and the difficulties associated predicting what this banking and regulatory body might do next. Four sources are cited in the bibliography.
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pattern. THE FEDERAL RESERVE The Federal Reserve is the central bank of the United States. It was founded by Congress in 1913 to provide the
nation with a "safer, more flexible, and more stable monetary and financial system" (Federal Reserve Bank 2002, PG). Today the Federal Reserves duties fall into four general areas:
* Conducting the nations monetary policy; * Supervising and regulating banking institutions and protecting the credit rights of consumers; * Maintaining the stability of the financial
system; * Providing certain financial services to the U.S. government, the public, financial institutions, and foreign official institutions. Just how does the Federal Reserve conduct
its various duties? To begin with, in 2000 the Federal Reserve raised rates five times in an effort to ward off inflation in the then healthy United States economy.
According to industry analysts, they expected more rate hike when the Federal Reserve met on the monetary policy in the spring of 2000. Trying to follow the Federal
Reserve monetary system and predict what it will do is not easy. In the year 2000, for instance, there were signs that a slowdown would soon be under way,
even though at that time the economys momentum was still very strong. The way economists could predict this is because the total production of goods and services had zoomed
ahead at an annual rate of 5.4% in the first quarter. This is the way the monetary authorities help control the currency in the United States. By watching
the economic forecasts and making predictions on what the economy is going to do, certain steps can be taken to ensure that hopefully the United States will never see another