Review the below resources and address the key questions facing the Federal Reserve and its handling of interest rates.
Inflation Versus Recession – The Fed’s Dilemma https://www.barchart.com/story/news/9112688/inflation-versus-recession-the-feds-dilemma
Volcker’s Handling of the Great Inflation Taught Us Much
https://www.stlouisfed.org/publications/regional-economist/january-2005/volckers-handling-of-the-great-inflation-taught-us-much
Address the following issues, assuming you were the Chairperson of the Federal Reserve:
Assuming the current inflation rate (see the latest CPI), what is the appropriate level of interest rates to quell inflation?
Should the Fed consider the effects of interest rate increases on employment, or should quelling inflation be the main concern?
What happens in the long run if the Fed fails to address inflation in the short term?
How will any adjustment in interest rates affect your business and personal aspirations?
Are there any lessons from the reading on the Volcker strategy from the early 1980s for breaking the back of inflation?
