Federal Reserve Essays

Federal Reserve Essays Federal Reserve Essay Federal Reserve Essay The U.S. Economy was affected in many ways by the numerous tax rate cuts; the affects include the stock market, manufacturing, retail sales, unemployment, U.S. consumer confidence, and rumors of wars.The Feds goal is to make money more available to consumers, who drive two-thirds of Americas economy, and keep them spending.Most economists think the terrorist attacks of September 11, pushed the U.S. Economy, already weak after a year-long slowdown in spending by businesses, into a recession.The terrorist attacks have significantly heightened uncertainty in an economy that was already weak, the Fed statement said.Business and household spending as a consequence are being further damped.Recent data hinted that the beleaguered manufacturing sector, which has borne the brunt of a year-long slowdown in the general economy, was beginning to recover before the attacks.But there have also been signs that consumer confidence was beginning to wane before the attacks, an d it has certainly done so in the days since. (Cnnmoney,10/02/01)One may question if the Feds policy moves are effective any more.After all, it would seem that nine rate cuts in a year would at least have had an impact on stock prices, which usually resond positively to lower rates.Instead, major stock indexes, even before Sept. 11, were below the levels they held before the Fed started cutting rates.The stock market discovered that many of the numbers it had been using to try to make a case for buying expensive stocks ranged from aggressively promotional to outright lies and one of the Big Five accounting firms was convicted of fraud. (Macleans, 9/16/02)The travel industry was in crisis, and some airlines would go bankrupt.On a fiscal side, President Bush and Congress had approved a $40-billion emergency relief package and a $15-billion bailout of the airline industry in the day.