Federal Open Market Committee Report For District 8 | My Paper Hub
Question 1: An analysis of current economic condit...
Question 1: An analysis of current economic conditions of
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.
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