CURRENT CONDITION AND FORECAST FOR THE NATIONAL ECONOMY IN THE UNITED STATES, AND THE FOCUS OF THE FEDERAL RESERVE IN THE IMPLEMENTATION AND APPLICATION OF MONETARY POLICY
This research examines the current condition and forecast for the national economy in the United States. The sources for this examination include the following:
Monetary Policy Report to the Congress as of 15 July 2003 (the most recent report)
Testimony by Federal Reserve Chair Alan Greenspan before the Committee on Financial Services, United States House of Representatives on 15 July 2003, presented in conjunction with the delivery of the Monetary Policy Report
The so-called "Beige Book" report of the Federal Reserve System as of 30 July 2003, which summarizes economic conditions and projections nationally and in each of the 12 Federal Reserve districts
A press release by the Federal Open Market Committee (FOMC) of the Federal Reserve on 12 August 2003, and
A speech by Federal Reserve Governor Susan Bies dealing with corporate governance that was delivered to the annual meeting of the American Bar Association on 10 August 2003
There are four issues of special interest in this examination. These issues are as follows:
The state of the economy in the United States
The primary concern of the Federal Reserve in relation to monetary policy
The stated direction of recent monetary policy, and
Policy actions implemented by the Federal Reserve in support of the stated monetary policy
Condition of and Forecast for the Economy of the United States
The Federal Reserve (2003b), in the most recent Monetary Policy Report to the Congress, stated that "the subpar performance of the United States economy extended through the first half of 2003" (p. 1). The Federal Reserve (2003b) then continued the report by patting itself on the back, stating that "accommodative macroeconomic policies à helped to sustain aggregate demand" (p. 1). What the...