Federal Open Market Committee Report For District 8

Question 1: An analysis of current economic conditions of the district.

District 8 is one of the fastest economically evolving neighborhoods in the United States in the recent years. It, however, remains as one of the most populated areas according to the land mass. The economy has witnessed an increase in the gap between the social-economic classes over the years with the consumer spending being dependent on the social class of the individual. Following the economic recession, the rate of unemployment has also risen substantially leading to a slow GDP growth in the district (Bea.gov). The prices have also been shifting with an observable price instability over the past years, but the federal government t in collaboration with the local authorities are coming up with some policies to regulate the prices within the District and beyond. Business patronage has, however, been at an all time high with the authorities attempting to ensure more investors invest in the District leading to more employment opportunities and pushing the rate of poverty further down thus leading to more consumer spending (Holzer, Schanzenbach, Duncan, and Ludwig). The price stability will also be achieved by increased competition among the business instead of the common few business and resource owners controlling the prices (Bea.gov).

Question 2: Discussion of prospects for any economic and financial conditions in the district shortly.

District 8 is experiencing an influx of the number of bars and restaurants over the last five years, and the business support forthcoming from the authority is further encouraging. The competition for commercial space and market share is also causing an additional chasm to form between the upper and the lower level of businesses creating an influx of enterprises that require alternative moneymaking strategies. The increased investment in the district is also leading to increased employment in the area and leading to increased tax collection and the Gross Domestic product in the region. Additionally with the increased investments in the district, there will be increased competition between the market rates (Bls.gov). However, declining access to affordable housing options is rapidly contributing to the changing demographic result to a rapid decrease in affordable housing options for the residents. There is rent increases in the region resulting from the competition for the spaces and the increased entry of other players in the market. The budget falls witnessed in the district 8 in the recent past is also an area that is bound to change following the increased revenue collection that may come with increased investment, employment and subsequently the economic growth in the region. However, it is important that there be policies and initiatives to ensure that the employability of the locals is ensured to ensure they can fit in the opportunities created (Bls.gov).

Question 3: A recommendation as to whether short-term interest rates should be raised, lowered, or kept the same based only on the economic conditions of the district

The short-term interest rates in District rates should be kept at as low as possible. It is because, the District is highly reliant on creating more business opportunities and encouraging the investors and the youth to be more entrepreneurial thus creating more employment opportunities. With low-interest rates, the public is bound to engage in more borrowing and risk taking in businesses (Federalreserve.gov). Moreover, the low-interest rates would result to lower costs of doing business in the region, hence lead to cheap commodities, and hence not press down on the public that is recovering from the economic recession. With the increase in unemployment and poverty, the interest rates need to remain low to ensure there is increased borrowing to set up businesses that subsequently translated to more employment opportunities (Holzer, Schanzenbach, Duncan, and Ludwig). The lowered interests rate to act as the incentive for the entrepreneurs to invest more and take further risks. Moreover, with the decreased affordability in housing that is already present within the district, it would be unsustainable to raise the interest rate in the district since the housing mortgages would also get inflated making it even more unaffordable (Federalreserve.gov). Lowering the interest rates would be a way to solve the housing problem since it would make the mortgages affordable to more people thus presenting a breakthrough on the housing problem in District 8. 

Question 4: Identification and discussion of national or international issues of special economic concern at present or shortly

The issue on energy is not unique to District 8 alone as it is a global concern. Just as is the case with other districts, regions and countries around the world, the energy issue is an increasingly complex issue. It is because, the environment, economy, and energy are all interconnected making it a difficult and complex issue to control and also plan for in the future. It is because, all the forces affecting climate and the resulting climatic change also have a direct or indirect effect on energy also interlinked with the economic prosperity of the district. Moreover, energy regulation and production are capital intensive and so with changes in the economy, the energy sector is also one of the areas that are hardly hit by the changes. With the increased need for independence for the different districts in the country, there is also an alarming need for the various districts to come up with avenues and policies that will ensure that they exude a form of independence in the energy they require for the daily running of the economy. Therefore, District 8 has the task of coming up with a comprehensive energy policy that ensures sustainability ion the energy sector in the longer, and short run.

Question 5: A recommendation as to whether short-term interest rates should be raised lowered or kept the same based on the economic conditions of the nation as a whole.

The short-term interest rates of the United States should be increased. It is because of the possible economic threat posed by the whirling global stock market, China’s devaluation of the Yuan and the persistent concerns about the stability of the Eurozone. With the scenario, it is advisable that the Federal Open Market Committee consider raising the short-term interest rates in the country (Federalreserve.gov). Moreover, with the instability experienced by the global economies, the economic stability enjoyed by the US economy is bound to make it the ideal investment destination and hence the need for an increase in the short-term interest rates that have been at their lowest since 2008. Keeping the interests rates at that low with the economic recovery, it may lead to further distortion of the economy due to an influx of money in the economy and also the increased possibility of taking the unnecessary risk without making proper risk analysis since the access to the money is easy.