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In the current economy mid-COVID 19 pandemic, does Federal Reserve Bank have a continued vital role...

In the current economy mid-COVID 19 pandemic, does Federal Reserve Bank have a continued vital role in stewarding the economy?

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The covid 19 has led to the severe fall in the economic activities, thus output has contracted and unemployment rate has risen above 10 %.

The federal reserve has taken the prompt actions to prevent the onset of recession in the economy. thehFollowing steps have been taken by the federal reserve:

  • Federal reserve bought the securities through the open market operation.
  • Federal fund rate has been decreased to almost zero.
  • Fed encouraging banks to lend out to the small scale industries.

Fed has almost taken the all steps to prevent the recession. It might further go with quantitative easing program to drive up aggregate demand further.

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