Helping the economy may be hard although the Federal Reserve is trying to discover a way to do so. They might maintain course or even go as drastic as making stimulus moves that are risky. Late Tuesday is when the decision may be made, although trading has been slow.
One option available
The first option in front of the Federal Reserve is one of the most common – maintaining or dropping interest rates. The Federal Reserve determines all of the interest made on online personal loans. Since the rates are so low, more would want to get some credit going. The risk, nevertheless, is that deflation could stifle no matter what gains may be made.
Federal Reserve’s second option
It is possible that the Fed might just purchase government debt as an option. The Fed does have some cash on hand to offer a personal loan to the government. There were mortgage investments that made this income which might make long term interest rates go down a bit. No borrowing would be stimulated with this plan.
Federal Reserve’s 3rd option
The riskiest move, and the one with probably the most payoffs, would be for the Fed to start purchasing securities again. The Federal Reserve in 2009 bought $1 trillion from Fannie and Freddie in securities. Though this helped encourage lending, Fannie and Freddie are nevertheless in trouble. The amount of money lent out would be more while debt would be guaranteed. Even payday loans will die off with investors pulling all their money if the Fed did this admitting the economy really is in bad shape.
