In the article published by CNN, "2 Trends Janet Yellen Calls 'Disturbing'" by Annalyn Kurtz she talks about economic trends that the Fed can't control. Kurtz writes that one "very disturbing trend" is about 3.5 million Americans have been out of a job for at least six months. This amount of people is 35% of all unemployed. The other disturbing trend is income inequality. Not only is there inequality in income but also in wealth. But the Fed can't fix either of these problems. This is because they can not single out specific regions or industries that need the most assistance. Kurtz says The Fed can try and trigger economy by making it cheaper for businesses and consumers to take out loans by lowering interest rates and buying bonds. Yellen and the rest of the Fed hope that this will lead to job creation in many industries. In my opinion, the actions that the Fed is taking will be helpful. They can not do anything to completely solve the problem but they are taking the right step and aren't ignoring the problem. Unemployment and income inequality is affecting society everyday but hopefully the action taken will improve the financial state for many Americans.
http://money.cnn.com/2014/05/08/investing/yellen-inequality-unemployment/index.html?iid=Lead
It is hard to fix problems that big. Those problems that the Fed can't fix are hard because they involve lots of little problems. It is good that the Fed is taking some steps to fix the issues that way we can one day have a better economy.
ReplyDeleteThis article is very interesting! I didn't know that government shutdown also affects the Fed so much. I agree that the Fed's decision is helpful. I hope the Fed will be able to fix these problems, but it seems hard to do so.
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