The Power of the Federal Reserve

1. Introduction û The power of the Federal Reserve

2. Problem statement û Absolute power corrupts

3. Background information û Financial markets, financial institutions and financial intermediaries

4. Research data û Citations of work

The U.S. Federal Reserve Bank operates with little or no control or oversight. On one hand, this is seen as positive because it helps to ensure the independence of the federal reserve system. On the other hand, the fact that there is no effective oversight by any government agency means that this entity is not necessarily accountable to the Congress or to the Executive branch. Therefore, this institution, which wields a tremendous amount of influence, as this nation's Central Bank is self controlled, self-managed, and self-directed. There are those who wish the Federal Reserve were less independent an autonomous.

Richard Miller questions Chairman Greenspan's impartiality, independence, as well as the 'a-political nature' of his work with the Federal Reserve. Miller, writing for Newsweek, comments that the Chairman has been in the news speaking out on topics ranging far from his home turf of monetary policy. In the process, he has been accused by his critics of being a shill for the White House for his support of the President's tax cuts, an opponent of minority housing and a foe of

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fall. Finally, according to Samuelson, consumers might delay purchases, believing future prices will be lower. Deflation does not always spell disaster (Samuelson, 42). A financial market is a market in which financial assets are traded. In addition to enabling exchange of previously issued financial assets; financial markets facilitate borrowing and lending by facilitating the sale by newly issued financial stocks and bonds. Examples of financial markets include the New York Stock Exchange, the American Stock Exchange, the U.S. government bond market, and the U.S. Treasury bill auction. It is clear that the actions of the Federal Reserve and in particular the actions of the Federal Open Market Committee can have a direct, significant, and almost instantaneous impact on the financial markets. The financial markets in question take four basic forms, which are: The auction markets. An auction market is some form of centralized facility by which buyers and sellers, through their commissioned agents or brokers, execute trades in an open and competitive bidding process. The over-the-counter (OTC) market has no centralized mechanism or facility for trading. Instead, the market is a public market consisting of a number of dealers sp
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Some common words found in the essay are:
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Approximate Word count = 2695
Approximate Pages = 11 (250 words per page)

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