Before the financial crisis of 2007 and 2008, the U. S. Federal Reserve used to cut interest rates to stimulate the growth rate and help the economy get back on track. It cannot do the same now as interest rates are already close to zero percent. One of the options before the Federal Reserve is to do quantitative easing.
The Federal Reserve will start purchasing U. S. Treasuries, mortgage-backed securities and corporate debt. Most of the economic experts stress that these steps will have disastrous consequences for the U. S. economy. They also feel that if these steps are implemented it could lead to hyperinflation in the economy.
Since the Federal Reserve is not owned by the U. S. Government, many experts are questioning if it should be given powers to control the fate of the U. S. economy. They point that it needs to take decisions that will be in the long term interests of the U. S. economy.
Some of the leading economic experts have already criticized the policies adopted by the U. S. Federal Reserve. They have argued that it has abused its power and these measures had a significantly negative impact on the U. S. economy.
The U. S. Government is also under pressure to reduce high levels of deficit and take effective steps to ensure that the economy can start recovering soon.
The economists feel that unless effective steps are not taken to take care of these things, the U. S. economy is surely headed for a collapse.
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