Assessment of the Current Economic Condition in the USA Research Paper

Assessment of the Current Economic Condition in the USA - Research Paper Example During the last two years employment level in the country continuously declined and as such the pace of economic growth has slowed down. As such the overall role of FED becomes relatively more critical because of the monetary policy regulator of the country. A critical assessment of the overall economic situation of the country is therefore of critical importance as it will allow a better policy formulation as well as provide a broader understanding of how the different variables are acting together to create this sort of economic crisis. The basic purpose of this report is to assess the overall economic conditions of the country, an assessment of the steps undertaken by FED so far and to produce set of policy recommendations which may be considered by FOMC in its next meeting. In order to discuss and assess the current status of the economy, it is important that the background information must also be provided in order to assess the core issues faced currently faced by the US economy. During 2008, the Bureau of Economic Research publically announced that the US economy is in a deep recession. This announcement was just a mere acknowledgment of the fact that the country’s economy was already under a threat from going into the recession and probably depression also. If one attempts to trace the origins of the current economic crisis, it will emerge that the situation started to get worse when the financial sector as a whole was gradually de-regulated by the authorities. The de-regulation of the financial sector allowed banks and other financial institutions to engage in the practices which were relatively risky for the long-term survival of the firms. As such the focus was on the achievement of short-term results rather than ensuring that the long-term stability is achieved.