Federal Reserve Paper - Monetary Policy Report to the Congress

After reading the “Monetary Policy Report to the Congress” reported by the website Federal Reserve.com (2011). This student is almost more confused presently than ever. The facts and figures are difficult to wade through, but this student will give it a try.

The purpose and function of money in today’s world market are still assets in which citizen’s exchange for goods and services received or for paying one’s creditors. Revenue (cash) is utilize in implemented to do four operations, which is store accounts, medium exchange, unit of account, and standard of deferred payments.

Store accounts basically are revenue is allowing to be saved. Revenue is a standstill just sitting, not going anywhere. Medium exchange is revenue is in action and obtains an exchange value for goods and services. Unit of account is revenue is exchanged for goods and services, which have not a set price. Standard of deferred payment is a mixture of the other three uses of revenue. These four functions of money are consistently increasing and decreasing by the United States central banking system.

The banking system that is used by the United States is called the central bank controlled via the Federal Reserve Bank. The Federal Reserve Bank is regularly checks out the economic health of the United States to maintain the monetary police to help it become steadfast. The Federal Reserve three tools of monetary policies to aid in the balance of the United States economy are discount policy, open market, and reserve requirement. The three tools, which are at the Federal Reserve disposal help the central bank to regulate the supply and demand, and to alter the level of deposits made into banks accounts.

The Federal Reserve’s watches very closely at the direction of the economy because of the very low and slow recovery of the economy the Federal Open Markets (FOMC) committee has changed the way one maintains federal funding rate. “At the end of June the Federal Reserve concluded its purchases of long-term Treasury securities under the $600 billion purchase program announced in November 2010; that program was undertaken to support the economic recovery and help insure the inflation, over time, returns to level consistent with the FOMC’s mandate of maximum employment, and price stability” according to the website Federal Reserve.com (2011). The committee realizes in June of this year it would check more regularly on the bulk and amount of one’s holdings of securities and to alter the bulk of said holdings to allow the support the very most in job holdings