Should Feds Continue with Expansionary Monetary Policy or Exit Strategy?

Over the past few years, the Fed has tried to improve the economy by lowering interest rates close to zero, raising the inflation rate, raising housing and household asset prices. This will result in more people purchasing products and services, resulting in increased consumption expenditure. According to data provided by the US Department of Commerce today, the economy is recovering from recession through the expanding monetary policy. However, some people think that it takes a long time to recover the economy and when the Fed is beginning to take the exit strategy.

In theory, expanded monetary policy should lead to economic growth and a decline in the unemployment rate. This also leads to an increase in inflation. To some extent, the expanding monetary policy of 2008 helped the economy recover. However, the economic recovery is weaker than expected and shows the limit of monetary policy.

Monetary policy is called expansion or contraction. Expansion policies aim to accelerate economic growth, while austerity policies are trying to limit economic growth. Expansion policies have traditionally been used to try to cope with unemployment in recession by lowering interest rates in the hope that loose credit will attract business expansion. This is accomplished by increasing the available money supply in the economy. The expansion policy is trying to promote the growth of total demand. As you can imagine, total demand is the sum of personal consumption, investment, government expenditure, imports. Monetary policy focuses on the first two elements. The central bank encourages personal consumption by increasing the amount in the economy. Increasing the money supply will lower the interest rate, thereby promoting loans and investment. Increased consumption and investment will lead to an increase in aggregate demand

Monetary policy is called expansion or contraction. Expansion policy means that the financial authorities are using the tool to revitalize the economy. In the expansion policy, we will maintain short-term interest rates below the normal level or increase the total money supply in the economy faster than usual. Traditionally I am accustomed to fighting the unemployment of depression by lowering interest rates, hoping that lower credit can attract business expansion. This will increase the aggregate demand (the overall demand for all goods and services in the economy), which will increase short-term growth as measured by the growth of Gross Domestic Product (GDP). In the extended monetary policy, the value of the currency usually decreases compared to other currencies (exchange rate)

Monetary policy is the process by which the country changes its money supply. The country 's financial authorities strengthened monetary policy through expanded monetary policy and reduced monetary policy through strict monetary policy. It has many tools that you can use, but it depends greatly on raising or lowering federal funds rates. This benchmark rate will guide all other legislators to adjust fiscal and monetary policy. It's not. why? Their fiscal policy reflects the priorities of individual legislators. They are concerned about the needs of their supporters. Often the needs of these areas will exceed the economic priorities of the country. Therefore, fiscal policy is usually contrary to economic needs. Central banks were forced to use monetary policy to offset poorly planned fiscal policy