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

U.S Monetary Policy in 1995When Alan Greenspan presented the Federal Reserves semi-annual reporton financial policy to the Subcommittee on Domestic and International MonetaryPolicy, the Committee on Banking and Financial Services, and the U.S. House ofRepresentatives on February, Dr. Greenspan touted a cautionary yet affectionateview of the U.S. delivery. He states that "With inflationary pressuresapp bently receding, the previous degree of simpleness in monetary policy was nolonger deemed necessary, and the FOMC consequently implement a small reductionin reserve market pressures hold water July." (Greenspan, 1996, Speech)During the Summer and Fall of 1995, the economy experienced astrengthening of inwardness demand growth. According to Greenspan, this increasein aggregate demand brought holy 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 1 995. Hestates "the economy, as hoped has moved onto a trajectory that could bemaintained--one less steep than in 1994, when the rate of growth was clearlyunsustainable, yet one that nevertheless would incriminate continued significantgrowth and incomes." (Greenspan, 1996, Speech)     Towards the end of the year, the economy showed signs of slowing.Fearing a draw out slowdown or even a recession in the economy, and withinflationary expectations waning, Chairman Greenspan and the Federal Reserve cutrates again in December. (Greenspan, 1996, Speech)     There are, of course, critics of 1995s monetary policy. Most of thecriticism came in the early transgress of 1995 when the Fed raised rates again.     In the article "Are We Losing altitude Too Fast" from the May 1, 1995issue of Time magazine scripted by gutter Greenwald, he explains that the economy capability not be coming in for a "soft landing" like the federal official 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 hurt individuals andthe economy as a whole. "Corporate layoffs are far from over," says Greenwald,"they generally race when firms find themselves in an economy that isweakening." (Greenwald, Time, 5/1/95, p80)     Unemployment and layoffs arent the only social function to worry about accordingto Mr. Greenwald. The automobile industry and the housing markets are bothgetting hit in the pocket books. Paul Speigel, owner of a New York cardealership explains his woes by saying "Were doing our stovepipe 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 new vehicle."John Tuccillo, chief economist for the National Association of Realtors states