The Federal Reserve was constructed to have a significant impact on the US economy.  As indicated in a recent blog post, it both reacts to economic forces and seeks to shape them. 

In a 2009 60 Minutes interview, then Fed chairman Ben Bernanke discussed the role of the Fed, particularly in regard to stabilizing the US economy.  This interview remains significant today because it offers a rare look inside the Federal Reserve.  It has the ability to help us understand not only the actions of the Fed following the Great Recession but also the actions it continues to take today.

Pre-Writing Activity
Do some background research into the Federal Reserve making sure to look into the following topics: What is the Federal Reserve?  What are its goals and role? Who owns the Fed?  How do its policy tools (open market operations, discount rate, reserve requirements) operate?

Blog Activity
As discussed in the interview, the Federal Reserve was created in large part to address economic crises in the United States.  After watching the video, consider the following question: How does the working of the Fed influence the way it operates and the actions it takes during financial crisis?  In other words, how does its structure and designated powers impact its approach to economic challenges?  Be sure to make connections between items discussed in the video and the information you gathered during pre-writing.  

Reacting to economic underperformance, the dollar continued to edge lower earlier this week following its worst-performing stretch in almost a year.  It dipped further on Wednesday as the Federal Reserve indicated it will continue to raise interest rates in the near future.  Concerns about weak first-quarter indicators, including inflation, will not alter the rising interest rate strategy. As the dollar fell 0.3%, the Dow Jones Industrial Average rose 74.51 points, or 0.4% while the S&P 500 increased 0.2% and the Nasdaq gained 0.4%.

Normally, higher interest rates themselves and the expectation thereof propel the dollar higher and market indicators lower. The market’s reaction to the Fed seems to indicate that the U.S. economy is weak but not terribly weak and that the Fed is cautiously optimistic about near-term economic activity.