The Real Effects of “Fed” Intervention
Caeden A. Byrd
Dr. Kelly Noe
Dr. Stephanie Ross
This paper is to inform the reader about the Federal Reserve and the overall banking system in the United States. It investigates how the policies enacted by the Federal Reserve affect Americans through their open market operations, inflation, and manipulation of the M1 money supply. The method used for this research paper is comprised of publicly available financial data from accredited institutions that are required to release this information. The conclusion found is that the Federal Reserve is enacting policies that help the economy in the short-term by providing much needed liquidity to businesses and entrepreneurs in time of recession or economic drawback. However, the long-term effects have been putting unneeded pressure on the middle and lower economic classes due to the rampant increase in the money supply, causing the prices of goods and services to increase alongside it. Evidence suggests that these policies may force many Americans to be stuck in part-time jobs, living paycheck to paycheck, and resulting in their overall wealth diminishing.