Federal Reserve: Battling Recession and Maintaining Financial Stability - Essay Sample

Introduction

The American central bank is the core policymaking institution charged with handling recessions; it is also among the numerous institutions in charge of regulating banks and making sure the stability of the financial system. Beginning in 2008 and the consequent years, the Federal was on the frontline in combating relation crisis in offering banking systems and the normal economy. In its initial war on combating the crisis, the aged deployed many tools, including traditional methods of monetary policy and a wide range of unconventional measures (McConnell, et al., 2009). The main agenda was; to cut interest rates, allow large-scale assets purchase and interest rates on forwarding guidance.

The Federal Reserve measures were as follows; to increase or lower the interest tariffs, as economic conditions required it; to trade and purchase Unite States' government dues in treasury coffers and notes leading to the leasing of the government monetary sector, and to expand on cash flow and credit cards to various institutions in terms of finance. These were the main measures used by the Federal Reserve to fight the collapse and support the economy; the Fed the above measures.

The outcome of all these measures and efforts by the Federal reserve has been partially positive; the economy has ever since slowed down. Due to some of the measures that were enforced to the people of America, who were not ready for this gradual change of economy, some of the politicians we greatly irritated about these measures too. The short-term debt imposed on the economy was primarily supposed to increase the rate of employment. Still, ever since there were numerous cases of unemployment and the Americans were left to suffer.

The Long-Term Effect of Impact on the Economy

In the long run, economists have discovered conditions and traces of long-lasting effects on the economy. In the future, the rate of the job market will decrease, and there will be a loss of jobs and falling income that might force families to have difficulties getting food and educating their children. This might also lead to frozen credit card markets, reduce consumer spending, and stop the creation of other small businesses. In all these cases, an economic recession can lead to scarring, which is long-term damage to an individual's financial situations and economical in large.

Other Long-Term Damages Because of Recession

Damage in the Economy

This is because of higher rates of unemployment in the future generation, lower or poor wages and incomes, many opportunities in general when it comes to business discipline. In the current system, investment companies, the education system, and opportunities in the field of economics are more likely to suffer.

Education System

Many research has been carried out, and education system or investing in human capital, is one of the most important factors in the ensuring of growth of the economy, This serves as the main key in the developing sector as one of the most essential in the growth of America's economic sector.

Conclusion

Recessions can have a greater long-lasting impact. American's should consider fighting recession with haste as a long-term effect on the economy in general. The loss of investments in the global competitive environment, education, and skills are more generally altogether can bring down the prosperity of America, if the initial global challenge is not well curbed. The reinvestment Act will better the economic growth, but these costs should be viewed as the main requirement to provide short-term aid that will even curb greater problems in the near future economic wise. The financial crisis taught American has about the confidence of the stock market once fall can be restored by understanding the causes and predict future predicaments and outcomes, to ensure it is past. Markets have emerged with new strategies to fight the measures and any unique challenges in the economy, these allow investors to come up with better methods to survive in the stock exchange as well as a forge in the market.

References

McConnell, C. R., Brue, S. L., & Flynn, S. M. (2009). Economics: Principles, problems, and policies. Boston McGraw-Hill/Irwin.