2014 FOMC Meetings Essay Example | Topics and Well Written Essays - 3000 words

2014 FOMC Meetings - Essay Example After discussion and questions from the Bank presidents, the report is then ratified. The next stage is board’s staff representation where the board’s director gives a forecast; it is discussed and the bank presidents raise questions where necessary. Bank presidents then provide an overview of the economic conditions in their areas followed by the governors giving their national outlook. Agenda number two is about the monetary policy and domestic policy directives. Board Director of Monetary Affairs Division outlines different scenarios of the monetary policy, participants’ discuss them and then the chairperson summarizes and proposes any wordings to be made in the policy statements. Next, the participants have their lunch as they present the latest developments in Congress on the banking legislations of importance to the Federal Reserve. At exactly 2.15 p.m., an announcement is made regarding any change in the discount and federal funds rates. The announcement is made as a promotion to openness in banking. When FOMC meeting ends, the Chair of Fe deral Reserve gives a press statement to give out the decisions made. The January press statement shows some improvement in economic activities as well as improved labor markets. Unemployment rates have reduced, and there is an increasing household spending trend. Business investments have also improved which is believed to have stimulated the improved economic activities. The existing fiscal policy is seen to be pulling down economic activities, but it is losing its strength with time. With reduced unemployment rates, the committee sees a risk of inflation though it will be maintained at the committee’s objective of 2%. In the statement, the committee confirms that the target rate for the funds will remain to be 0 to 1/4 percent if the unemployment rate will stay 6-1/2 percent. However, the inflation rate is expected to be above the committee’s objective