For your initial post comment on the following questions Wha

For your initial post, comment on the following questions.

What is the current macroeconomic situation in the United States?
What should the Fed do about it?
What monetary policy tools should the Fed use to achieve the results you recommend?

Solution

US economic scenario is very volatile these days, some times better economic indicators such as decent job data paint good picture on the sound recovery of the economy from slowdown, but on other time , the weak economic data or rise in unemployment numbers shows the economy has slowed down bit further. I would say the US economy is struggling to recover these days on back of rising financial instability in Europe, record low commodity prices , slowing China and rising concerns over ISIL threat.

Fed is doing their job by keeping interest rates lower , but thats not working much. I would say this type of economic slowdown can be combat through fiscal spending. I will say the Fed should work more towards improving the financial regulation in the US that is good for the long term for the US economy. Moreover, generally, the Fed can use tools such as open market operations, lowering reserve requirements and keeping interest rates lower.

These tools can keep interest rates lower and encourage public and private spending in the economy that will enchance aggregate demand and reduce economic slowdown.