The Economy and The Fed

The stock market continued its volatile ways during the second quarter, finishing with small gains for the quarter. The bond market had a strong quarter as interest rates fell in response to slowing economic growth. It is also notable that the Federal Reserve cut the Fed Funds Rate during the third quarter for the first time in more than a decade. The U.S. economy is being impacted by slowing global growth and domestic trade policy.

There has been much discussion about interest rates lately and the Fed’s policies when it comes to making rate decisions, so we thought it might be a good idea to take a closer look at the Federal Reserve and what they do. The Federal Reserve is the central bank for the United States. They are charged with providing our country a safe, flexible, and stable monetary and financial system. That’s a pretty tall task. Through various mechanisms they attempt to keep the economy growing at a targeted rate while at the same time keeping growth from becoming overheated and causing inflation.

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