The Innovative Traveler - Challenges for Monetary Policy Part 4 of 14

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Challenges for Monetary Policy Part 4 of 14

By Webmaster, on November 24, 2008 01:14 PM

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It needs to be underscored The Best Forex Trading System Ever that being proactive and not passive in doing our job does not mean that we will abandon prudent decisionmaking. We are the central bank of the United States, the bellwether economy of the world. Our job is not to bail out imprudent decisionmakers or errant bankers, nor is it to directly support the stock market or to somehow make whole those money managers, financial engineers and real estate speculators who got it wrong. And it most definitely is not to err on the side of Wall Street at the expense of Main Street.

In fact, to benefit Main Street, we have a duty to maintain a financial system that enables American capitalism to do its magic. To this end, we have recently taken steps designed to circumvent bottlenecks in interbank lendingsteps that include changing the operation of our discount window and opening a new term auction facility. This facility has provided $70 billion in funds in roughly a month and will soon provide another $30 billion, and perhaps even more over time if needed.

In setting broader monetary policy and the fed funds target Ten Pips a Day rate, the Fed operates under a dual mandate. We are charged by Congress with creating the monetary conditions for sustainable, noninflationary employment growth. Put more simply, our mandate is to grow employment and to contain inflation. Unstable prices are incompatible with sustainable job growth. Some critics worry that we have forgotten that axiom. We havent.

The Innovative Traveler