Expansionary Monetary Policy

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The federal reserve should adopt expansionary monetary policy to stimulate the economy to promote growth and development. Currently our nation is in a position where there is no compelling reason to raise interest rates to combat inflation, therefor for the short term I believe we need to push for continuing to decrease unemployment and aim for wage growth. The economic outlook is unclear as foreign economic developments, in particular, pose risks to the United State’s economy. Expansionary monetary policy promotes a positive impact in a few different areas like local investment and global economy. Monetary expansion entails increasing the amount of money that is in our economy. This can be done by the Federal Reserve purchasing United States treasury bonds, reducing the federal funds rate, and by…show more content…
It is evident that we take action now to aid our economic activity. We can do this by adopting an expansionary monetary policy to stimulate our economy. The Federal Reserve has historically held rates at a relatively low level, but it is important that we gradually increase rates as our economy strengthens. Just last week our nation saw that, “the Federal Reserve sent a sharp, simple message to financial markets (on Wednesday): Pay attention. The Fed is thinking seriously about raising its benchmark interest rate at its next meeting, in June.” Our economy is not quite ready to tighten monetary policy. Expansion is relatively easy for the Fed to implement, and can be put in to action quickly. The Fed is already holding rates at very low level, but it is tough to predict what other global economies will do in the near future to stimulate their own respective economies. As a nation, I believe that in this moment in time, we need to continue the expansionary trend until we are stable enough to make great moves towards an ideal state for an economic
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