Committee Federal Open Market

One of the most significant organizations in the United States is the Federal Open Market Committee (FOMC). Controlling the movement of money in the United States falls under its purview. Most economic specialists are obsessed with the idea that they ought to sit on the committee charged with keeping the value of the United Currency at a particular level. The committee chairperson is typically regarded as the second-most powerful person in the United States, after the president. Some disagree with the FOMC because federal courts do not have any authority over its activities (Jung, Alexander,& Sophia Latsos 25). The organization has the authority to control the GDP, interest rates, employment rates, inflation rates and other factors that may affect the value of the currency of the United States. The members of the committee are presidential appointees who are confirmed by the members of the senate. In the appointments, there has been bias in the people who the presidents choose. The party with the majority in the senate is the ones who are likely to get their members in the committee. The members of the senate normally side according to the decisions in most instances. Despite being chosen by certain political parties, the duties of the members of the committee remain to control the currencies in the country (Jung, Alexander,& Sophia Latsos 25). This paper affirms that the members of the FOMC are not neutral political and are likely to make their decisions depending on the needs of the political parties that choose them to be part of the committee.

From the records from 1947 to 2011, the members of FOMC are either oriented to either the republican or democratic party. This is same as the presidents who have been leading the state during these periods. The presidents have been members of the two political parties too. It is not possible that only members of the two political party alignments are the ones who have interests in being members of FOMC (Zaring, David T 34). FOMC is regarded as the monetary policy arm of the United States Federal government. The committee meets after every six weeks approximately. The meetings of the FOMC involve the analysis of the current economic state of the United States as well as the projected economic move in the near times. The committee also discusses how the expected change in the economy of the world could influence the economy of the Unites States in the future (Zaring, David T 34). Based on various information sources, the committee normally find it simple to find the best way forward to control the economy of the united States.

From the records, the members have been chosen through political alignments. However, each of the individuals has ensured that the economy of the United States is kept at its best at all times. From the records, the individuals have ensured that they reduce the inflation rates in the United Sates. Inflation rates can be reduced by increasing the interest rates do that no more money is left in circulation. The increase in the interest rates helps in regaining the value of the United Sates currencies (Zaring, David T 34). The government, through the monetary arm can create policies that can really help in the control of the inflation rates in the country. Among them is creating the contractionary policy that ensure that the interest rates are raised while the bond prices are reduced. The banks are asked to hold the money in the banks to ensure that the money that is in circulation (Zaring, David T 21). A high inflation rate is simply the reduction of the value of currency of a country when compared to the values of currencies of other nations. The committee always ensures that value of the United States currency is always is always stable.

No matter the party that has side lined with the committee members, the employment rates have always been reduced or maintained at their previous states. The committee seams to reduce the high unemployment rate through the creation of policies that favor the creation of labour markets to ensure that more jobs are created. The committee can ensure that low wage polices are instilled to ensure that more people are employed because the cost of maintaining the employee has been lowered to affordable levels to the employers. The monetary arm can also reinstate fiscal policies to ensure the amount of taxes that the government imposes on the business owners. Lower taxes would mean that the businesses could have more profits retained which would mean that more individuals would be employed. Therefore, the number of individuals who are unemployed can be reduced.

Using S&P 500 data, it can be noted that the values are increasing. The progress is similar to both the members of the Republican and the democratic parties. When any United states citizen what this mean to the economy, most of them would say that these shows that there is a great drop in the Economy of the united Sates (Tori, Cynthia Royal, 8). Tis would imply that it has high time the appointing of the members of the committee should be made according to competency and not the direction of the individual political orientation. If the financial markets can be disconnected to the real economies however, the United States economy can be said to have improved greatly. If the rates of unemployment’s are to go by, there has been significant improvement in the economy of the United States (Tori, Cynthia Royal, 4). The minimum wage requirements for the United States citizens have also improved greatly. The living standards of the United Citizens have significantly improved.

In consideration of the Dow Jones, the industrial average has been noted to increase from the time of power as the time progress. Industrial growth is very essential in then growth of the economy. Having more industries would mean that the government would have an opportunity to get surplus products that can be used in exports (Tori, Cynthia Royal, 8). More exports than imports mean that the economy of the country improves. The progress in Dow Jones, indicate that the committee though bias in their selection have the interests of improving the economy of United States at heart. The discount rates also indicate that they have been significant improvements in the operations that aim at improving the economy of the United States.



























Works cited

Jung, Alexander, and Sophia Latsos. "Do federal reserve bank presidents have a regional bias?." European Journal of Political Economy 40 (2015): 173-183.

Tori, Cynthia Royal. "Federal Open Market Committee meetings and stock market performance." Financial Services Review 10.1 (2001): 163-171.

Zaring, David T. "Law and Custom on the Federal Open Market Committee." Browser Download This Paper (2015).