Fed Pressures on the Economy

Document Type:Essay

Subject Area:Economics

Document 1

The United States of America has the Federal Reserve that looks into the money policies as the interest rates as provided for by the Congress. Therefore, in order to enjoy the benefits of the economy, the financial stability and related factors have to be duly considered and their effects to the population. The recent policy of the Federal Reserve in relation to interest rates seeks to ensure that the American people are in a position to be able to enjoy the benefits of the lending facilities. Primarily, the policy is set to meet the mandate of the Congress which is geared towards ensuring maximum and stable employment, long term interest rates and stable inflation (Federal Reserve, n. d). Regardless, the Federal Reserve continues to assure that in the event of the potential collapse of the economy, there are measures in place directed towards the recovery and or the prevention of collapse.

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The policy in its presentation is highly lucrative. The officials continue to postulate that they have considered all possible outcomes of the policy and therefore, they have preventive and recovery measures in place. However, in my opinion, it is a policy that bears more risks that assurance. The long term consideration of low interest rates is bound to affect the stability of the economy resulting in a recession. The Bible provides various examples on the effects that come about with low interest rates over long period of time. Essentially, the Bible documents that in the event of long term low interest rates, the rate of inflation is bound to go higher. The effect of this is that, many will start robbing from each other as is explained in James 5:1-3 and Amos 8:4-6 (International Standard Bible Encyclopedia n.

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