The Federal Reserve is a unique system managing the money supply as well as monetary policy of the United States. Designed to view a broad perspective of the economy and its activities all throughout the country. The main mission of the Federal Reserve Bank is to promote stable prices, encourage maximum sustainable economic growth, and support financial stability to citizens in the United States.(Mishkin) On December 23, 1913, congress created the Federal Reserve. Currently, there are 12 Federal Reserve banks and 25 regional banks throughout the nation. Including one in Chicago! In trying to achieve reasonable price levels and levels of unemployment the Fed comes across many challenges in order to improve the status of the economy. Challenges …show more content…
The public and our elected representatives have a complete right to know how the Federal Reserve carries out its …show more content…
In some situations the federal funds rate can be reduced, the result is stronger demand for products and services. This outcome tends to push wages higher, cost of production higher, reflecting the greater demand for companies to employ more workers to meet the demands of the economy. The changes in the actions in policy expectations will affect the economies performance in the future. Federal Reserve policymakers have to evaluate changes in inflation by monitoring several different price indexes which increases their responsibilities and the impact it makes on the economy is another important factor which is to be considered by the Federal Reserve.The employment challenge will be one where the Fed will continue to pursue many obstacles. Stated before, monetary policy influences inflation as well as the demand for goods and services throughout the economy, therefore, the demand for the workers that make those specific goods and services primarily through the impact on the financial limitation standing in the way of households and firms. Federal Reserve policy should strive for attainment of full employment, and the Fed is legally mandated to pursue any policy that promotes maximum employment with price stability. If employment is not attained to full employment state then the productivity and output of the economy is affected this in turn results into the underdevelopment of economy which in turn