Question

How did U.S. government responded to global health pandemic? What kind of steps have they taken? How did Federal Reserve responded to the recent health pandemic? Where is the Fed Funds rate as of today? Are there any other steps that can be taken by the government in terms of fiscal policies? Please elaborate.

Answer 1

United State government has reacted proactively in order to contain the effect of the pandemic by announcement of a medical stimulus package for the entire economy so that they can have adequate money in order to pay of their medical expenses.

Federal Reserve have also been proactive in taking various steps which can stimulate and stable the economy by cutting the interest rates drastically to range of zero to .25. so the lesser amount of interest rate will help in stimulation of overall demand into the economy the Federal Reserve has also insisted that it will further cut rates into the negative zones if the economy needed in order to get stimulated to survive and sustain.

Fed fund rates as of today is point .25 and it has been done in order to ease the pressure on various businesses and people as they are already facing the liquidity crunch due to shutdown of business.

there could we several bailout package could be rolled out if the situation get severe and if the situation triggers an economic collapse like in 2008,federalism can come out with bailout packages to save various industries and restrict the contagion.