For as long as anyone’s counting – maybe not historians, but you know what I mean – most countries’ economies have been fueled and secured by currencies backed by governments’ internal banks.
The United States of America and its self-named United States Dollar have been supported by fiscal policy changes resulting from closely watching world economies and the United States Dollar’s involvement in them through the Federal Reserve Bank.
Back in 2007, major banks started to tank due to what would soon became known as the subprime mortgage lending crisis, caused by big banks’ collective decision a few years prior to starting extending mortgages and other loans to people in suboptimal financial condition.
The Federal Reserve was forced to make several changes to fiscal policy to balance what caused a global recession – five instances of jacking up interest rates to inject increased strength into the Dollar, like how bodybuilders inject steroids into muscles to compete with others.
For the sixth – count ’em, six, 6 – time since the worldwide financial crisis of 2008, the Federal Reserve Bank has raised interests. Further, a minimum of two more fiscal policy changes are slated to come prior to the end of the calendar year, per representatives of the Federal Reserve Bank.
Yesterday, on Wednesday, March 21, 2018, “the Fed,” as it’s colloquially called, immediately raised interest rates by one-quarter percent, or 0.25%, to a new “band” – in simple terms, just a level between which interest rates fall – of 1.5% to 1.75%.
Ready for more fancy fiscal policy talk?
Following Wednesday’s move by the Federal Reserve, the effective federal funds rate weighs in at roughly 1.63%, the loftiest such going rate dating back to September 2008, during the height of the global financial recession.
The FOMC, or Federal Open Market Committee, of the Federal Reserve Bank has eight active, voting members. All eight of them voted for Wednesday’s proposed raising of interest rates, in turn making the fiscal policy proposal law.
According to officials at the Fed, “The economic outlook as strengthened in recent months.” While that’s great for the world to hear, and especially entities doing businesses in the United States of America, never having to make fiscal policy decisions for the sixth time in a decade would be even better.
February 2018 brought a national unemployment rate of 4.1 percent, a 17-year floor, making the streak continue for its fifth consecutive month.