fomc project

Suppose that Fed Chairman Jerome Powell and the eleven other members of the

FOMC have asked you to provide a 2,000-word paper (roughly 8-12 pages) outlining

what policy stance you think the Fed should take at its upcoming FOMC meeting on April 28

th.

The key question that your paper should address is this: “what policy stance should the Fed

announce at its upcoming FOMC meeting?” Since the federal funds rate is the primary

instrumental of monetary policy, as we’ll discuss in class this semester, it makes sense to frame

your thesis in terms of it (e.g. “In light of current conditions, we advise the Fed to

[raise/lower/maintain] its target federal funds rate to X.XX%,” and back up your argument for

why the Fed should raise or lower its target rates with data and evidence. That said, as we’ll

discussed in class, today’s Fed also places a heavy emphasis on another key tool of monetary

policy: the interest rate paid on excess reserves. Be sure to include the discussion of this rate into

your analysis.