Question

Evaluate Monetary Policy and how it works in inflationary vs. recessionary times . (Expansionary and restrictive...be specific)

Be sure to also include the following:

What policies did Jerome Powell appear to support? How do they seem to match the direction that Janet Yellen had taken in the past?

Summarize your thoughts about any major bank merger that may have occurred over the last 10 years; for example, Wachovia and Wells Fargo ...access any web information for this but you must provide the link to the article you use for this to be correct!

Provide your input on the bailout of the Financial Services industry and the future of banking.

Answer 1

Monetary policy tools by central bank can be used in recession and inflation to increase or decrease Aggregate demand and GDP using following ways:

1. Interest rate- decrease in recession , increase in inflation
2. Government securities- bought in recession , sold in inflation
3. CRR and SLR - decrease in recession, Increased in inflation

Jerome powell was against any sort if rate cut and clearly followed Janet Yellens rate hike decisions towards contractionary monetary policy to appreciate US Dollar.

Wachovia was US fourth largest bank and was acquired in 2008 by Wells fargo at 15billion dollar valuation as Wachovia was almost on verge of bankruptcy due to 2008 financial crisis.

Bailout of Financial industry is must in any nation to serve the liquidity and banking needs without which nation can take big hit and invite recession.

Future of banking would see lot of onsolidated financial statements by merger and acquisition and lot of emphasis on digital technology like Blockchain, AI and IoT.