current state of financial markets

Discuss the current state of financial markets

Discuss the Federal Reserve Current monetary policy and the effect it will have on sources the company will consider raising the appropriate capital

The Federal Reserve is cognizant that leaving rates low for too long can produce unintended consequences. At the same time, the Fed realizes that economic recovery has been slower than expected and therefore rates raise or tighten policy too quickly. The Fed's "dual mandate" is to look at both unemployment and inflation. On the positive side, the unemployment rate has fallen from nearly 10% in late 2009 to 5.6% as of December 2014. Improvement in the labor market was slower than expected, and wage growth is still weak, but there's no doubt been a sustained improvement. Inflation meanwhile continues to hold well below the Fed's desired level of 2%. The Fed now forecasts personal consumption expenditures (PCE) inflation between 1.0-1.6% in 2015.........mnbm

Monetary policy refers the nation's central bank means Federal Reserve influence the amount of money and credit in the U.S. economy. The primary goals of monetary are to increase employment, moderate long term interest and stable prices. Through effective monetary policy, Federal Reserve can maintain stable prices and support long term economic growth and maximum employment.

The Federal Reserve's three instruments of monetary policy are open market operations, the discount rate and reserve requirements.

Open market operations involve the buying and selling of government securities. In open market the Fed doesn't decide on its own which securities dealers it will do business with on a particular day. The discount rate is the interest rate charged by Federal Reserve Banks to depository institutions on short-term loans. Reserve requirements are the portions of deposits that banks must maintain either in their vaults or on deposit at a Federal Reserve Bank.