Federal Reserve policymakers cut their short-term interest rate target an aggressive half-point to 2% on Tuesday… This cut was the Fed’s 10th attempt this year to support the U.S. economy, which is still weakening after Sept. 11 attacks. The moves represent some of the most furious rate-cutting in Fed history… Fed officials have now pushed the rate banks charge each other for overnight loans to its lowest level since 1961…Major banks lowered the prime rate in [lockstep] with the Fed, bringing down to 5% from 5.5%. That translates into lower rates for home-equity loans, business loans, and some credit cards.

By taking the actions described in the passage above, the Fed was likely trying to:

decrease business activity

decrease the money supply

increase the amount of money that banks must keep in reserves

increase business activity

Question

EliRushing03 EliRushing03

08-11-2022
Social Studies

contestada

Federal Reserve policymakers cut their short-term interest rate target an aggressive half-point to 2% on Tuesday… This cut was the Fed’s 10th attempt this year to support the U.S. economy, which is still weakening after Sept. 11 attacks. The moves represent some of the most furious rate-cutting in Fed history… Fed officials have now pushed the rate banks charge each other for overnight loans to its lowest level since 1961…Major banks lowered the prime rate in [lockstep] with the Fed, bringing down to 5% from 5.5%. That translates into lower rates for home-equity loans, business loans, and some credit cards.

By taking the actions described in the passage above, the Fed was likely trying to:

decrease business activity

decrease the money supply

increase the amount of money that banks must keep in reserves

increase business activity

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Tundexi Tundexi · Answer 1 · 2022-11-10T18:00:53+01:00

As the Federal Reserve policymakers cut their short-term interest rate target, an aggressive half-point to 2% on Tuesday, this actions shows that the Federal Reserve was likely trying to increase business activity. Therefore, the Option D is correct.

What is the role of Federal Reserve in US banking system?

Also known as "Fed", is the central banking system of the U.S. that was created on December 23, 1913 with an enactment of the Federal Reserve Act after a series of financial panics led to the desire for central control of the monetary system in order to alleviate financial crises. The legislation aimed at establishing a form of economic stability through the introduction of the Central Bank which would be in charge of monetary policy.

Some of the general purpose of the Federal Reserve is that its monitors financial system risks and engages at home and abroad to help ensure the system supports a healthy economy for U.S. households, communities and businesses.