American Monetary Policy

1
American Monetary Policy

• The Federal Reserve kept interest rates unchanged
  on January 30 because it thought the economic
  recovery had begun.
• It forecast recovery for three reasons
• The steep fall in inventories--45 billion in the
  last six months of 2001--means businesses will be
  spending to rebuild them.
• The interest rate cuts of 2001 that have not yet
  had a chance to boost investment spending.
• The shift of the federal budget from surplus into
  deficit.