The Federal Open Market Committee (FOMC) (Essay Sample)

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FOMC PROJECT
The Federal Open Market Committee (FOMC) voted on Thursday, 17th September 2015 to leave borrowing cost at their current record low of zero to 0.25%. The reason for this was as a result of worries about the global economy, financial markets volatility and a sluggish inflation at the US economy. FOMC however hinted at a possibility of a modest policy tightening in the near future. The recent fall in the United States stock prices and a rise in the value of the dollar were already tightening the financial market conditions regardless of what FOMC decides to undertake. These influence of risky assets markets coupled with foreign markets were therefore central in its decision making process.
The major variables employed by FOMC include capacity utilization, labor market indicators, inflation trends and inflation expectations hence the reason for not increasing the rates up. The impact of this decision saw stock markets drop sharply across the globe with the Wall Street sell off resulting into Dow Jones industrial average falling by 255 points or 1.5% on Friday to 16,418 at the opening. Investors were unsettled by the dovish comments by the ch