U.s Monetary Policy In 1995 :: essays research papers

U.S Monetary Policy in 1995When Alan Greenspan presented the Federal Reserves semi-annual reporton monetary policy to the Subcommittee on Domestic and International MonetaryPolicy, the delegation on Banking and Financial Services, and the U.S. House ofRepresentatives on February, Dr. Greenspan touted a cautionary barely favorableview of the U.S. economy. He states that "With inflationary pressuresapparently receding, the previous stage of restraint in monetary policy was nolonger deemed necessary, and the FOMC thence implemented a small reductionin reserve marketplace pressures last July." (Greenspan, 1996, Speech)During the Summer and Fall of 1995, the economy experienced a fortify of aggregate accept produce. According to Greenspan, this increasein aggregate demand brought finished goods inventories and sales into nearequilibrium. The Feds fine tuning of the economy seemed to be paying off.Greenspan had a positive outlook for the economy for the rest of 1995. Hestat es "the economy, as hoped has moved onto a trajectory that could bemaintained--one less usurious than in 1994, when the rate of growth was cl earlierunsustainable, but one that nevertheless would imply continued significantgrowth and incomes." (Greenspan, 1996, Speech)     Towards the end of the year, the economy showed signs of slowing.Fearing a prolonged slowdown or even a recession in the economy, and withinflationary expectations waning, Chairman Greenspan and the Federal Reserve cutrates once again in December. (Greenspan, 1996, Speech)     There are, of course, critics of 1995s monetary policy. Most of thecriticism came in the early part of 1995 when the Fed raised rates again.     In the article " atomic number 18 We Losing Altitude Too Fast" from the May 1, 1995issue of Time pickup written by John Greenwald, he explains that the economymight not be coming in for a "soft landing" handle th e fed predicts. Trying tosustain 2 to 3 percent growth might lead us into a recession. Mr. Greenwaldexplains how the Feds actions in 1994 and early 1995 has contuse individuals andthe economy as a whole. "Corporate layoffs are far from over," says Greenwald,"they broadly accelerate when firms find themselves in an economy that isweakening." (Greenwald, Time, 5/1/95, p80)     Unemployment and layoffs arent the merely thing to worry about accordingto Mr. Greenwald. The automobile industry and the lodgement markets are bothgetting hit in the pocket books. capital of Minnesota Speigel, owner of a New York cardealership explains his woes by facial expression "Were doing our best to keep up thevolume by discounting, working on our customers, but the Feds rate hikes havedampened the ability of many Chevrolet customers to buy that bleak vehicle."John Tuccillo, chief economist for the National Association of Realtors states