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Setler79 [48]
3 years ago
11

What is the federal reserve and what is the FOMC?​

History
2 answers:
Vladimir79 [104]3 years ago
6 0

Answer:The Federal Open Market Committee (FOMC) is the branch of the Federal Reserve System that determines the direction of monetary policy specifically by directing open market operations.

The FOMC is composed of the Board of Governors, which has seven members, and five Federal Reserve Bank presidents.

The Committee has eight regularly scheduled meetings each year that are the subject of much speculation on Wall Street.

Explanation:Understanding the Federal Open Market Committee (FOMC)

The 12 members of the FOMC meet eight times a year to discuss whether there should be any changes to near-term monetary policy.1  A vote to change policy would result in either buying or selling U.S. government securities on the open market to promote the growth of the national economy.

The FOMC consists of the Board of Governors, which has seven members, and five Federal Reserve Bank presidents.1  Members of the committee are typically categorized as hawks favoring tighter monetary policies, doves who favor stimulus, or centrists/moderates, somewhere in between.

By tradition, the chairman of the FOMC is also the Chair of the Board of Governors.2  The current Chair of the Federal Reserve Board is Jerome Powell, who was sworn in on February 5, 2018.3  Powell is considered a moderate. Other members include Richard Clarida, Randall Quarles, Lael Brainard, and Michelle Bowman. The remaining two positions are vacant as of Dec. 12, 2020.4  

The vice chairman of the FOMC is also the president of the Federal Reserve Bank of New York,2  a position currently filled by John C. Williams, who took office on June 18, 2018, as the 11th president and chief executive officer of the 2nd District Federal Reserve Bank of New York.5  The president of the Federal Reserve Bank of New York serves continuously, while the presidents of the other Reserve Banks serve one-year terms on a three-year rotating schedule (except for Cleveland and Chicago, which rotate on a two-year basis)

zvonat [6]3 years ago
6 0

answer:

The Federal Reserve system (Fed) is the Central Bank of United States.

The Federal Open Market Committee (FOMC) consists of twelve members--the seven members of the Board of Governors of the Federal Reserve System; the president of the Federal Reserve Bank of New York; and four of the remaining eleven Reserve Bank presidents, who serve one-year terms on a rotating basis

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urban areas, where they worked in factories.

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Create a timeline here of at least 15 major events that occurred during the Great Depression era. Make sure include the date, an
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June 17: Hoover signed the Smoot-Hawley Tariff Act, which raised taxes on 900 imports.7 It originally was supposed to help farmers but ended up imposing tariffs on hundreds of other products.

Other countries retaliated, setting off a trade war. As a result, international trade began to collapse.

A drought hit 23 states from the Mississippi River to the mid-Atlantic region. It was the first of what later was called the Dust Bowl drought, the worst in 300 years.

As crops failed, farmers could not produce enough to eat. At first, Hoover asked the American Red Cross to help. As the crisis worsened, Congress appropriated $65 million for seed, feed, and food boxes.

March 4: Herbert Hoover became president. His laissez-faire economic policies did little to stop the Depression.

He believed a free-market economy would allow the forces of capitalism to fix any economic downturn. As a result, he lowered the top income tax rate from 25% to 24%.3

August: The economic activity from the Roaring Twenties reached its peak. After that, it started to contract. It was the true start of the Great Depression.

That same month, the Federal Reserve raised the discount rate from 5% to 6% to prevent inflation and defend the gold standard.4

Sept. 3: Dow reached a closing record of 381.7.5 The stock market would not return to its pre-crash high for the next 25 years.

Oct. 24: Black Thursday kicked off the stock market crash of 1929. Stock prices immediately fell 11%.

Wall Street bankers bought stocks, so only 2% was lost by the time the market closed.

Oct. 25-26: Stocks gained 1% on Friday but lost 1% during a half-day of trading on Saturday.

Oct. 28: On Black Monday, stocks prices fell 13%.

Oct. 29: On Black Tuesday, the market lost another 12% as a record 16 million shares were traded. When banks intervened this time, they worsened the panic.

Nov. 23: The stock market hit bottom and began trading sideways.

December: The unemployment rate was still just 3.2%. Since unemployment is a lagging indicator, it hadn't started to worsen yet.

There were more than 650 bank failures in 1929, part of a trend of such failures throughout the 1920s. As banks failed, it reduced the money supply because there was less credit available. That meant each dollar was worth more.

As the value of the dollar rose, prices fell, which reduced revenue for businesses. It also meant that debt cost more for lenders to pay back.

This created a ripple effect of personal and business bankruptcies.6July 21: Hoover created the Department of Veterans Affairs.

Nov. 7: The Bank of Tennessee failed. That led to failures of affiliate banks in the next few days. Although the economy was improving, weaknesses in the banking system pulled it back down.

Only one-third of the nation's 24,000 banks belonged to the Federal Reserve banking system. Non-members did not have enough access to reserves to fend off bank runs.

As bank failures grew, depositors rushed to banks to pull out their savings.8 Banks held only 10% of all deposits, so they could lend out the rest. A bank run would quickly put it out of business.

In the fall of 1930, bank runs spread throughout the Southeastern United States. By the end of the year, more than 1,300 banks had failed.6

Dec. 11: The Bank of the United States failed.9 It was the fourth-largest bank in the nation, and the largest bank failure in history at that time.

Worried about budget deficits, Hoover returned the top income tax rate to 25%. The economy shrank 8.5%.

The unemployment rate rose to 8.7%. Deflation set in as prices fell 6.4%.

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