Federal Reserve Governor Lael Brainard

Instructions:
Answer the following questions using the referred Wall Street Journal (WSJ) articles. Click on the links to access the articles.

  1. Read the articles entitled “Fed’s Brainard Sees Substantial Economic Risks and Slow Recovery” at https://www.wsj.com/articles/feds-brainard-sees-substantial-economic-risks-and-slow-recovery-11594749590
    and
    “Bank of America Sees Reasons for Optimism in a Coronavirus Economy” at https://www.wsj.com/articles/bank-of-america-profit-falls-52-on-loan-concerns-11594897441

a. Why do Federal Reserve Governor Lael Brainard and Bank of America Chief Executive Officer Brian Moynihan have differing views on the economic recovery?

b. Do you think consumer spending is the foremost important factor for economic recovery?

  1. Read the following articles and then answer the questions.
    The first reading is entitled “The Era of Fed Power Is Over. Prepare for a More Perilous Road Ahead” at https://www.wsj.com/articles/shrinking-influence-of-central-banks-ends-decades-of-business-as-usual-11579103829. (Links to an external site.) This article was published on January 15, 2020.

The second reading is entitled “The Federal Reserve Is Changing What It Means to Be a Central Bank” at https://www.wsj.com/articles/fate-and-history-the-fed-tosses-the-rules-to-fight-coronavirus-downturn-11587999986. (Links to an external site.) This article was published on April 27, 2020.
a. These two articles suggest contrasting roles for central banks, and, in particular, the Federal Reserve Bank. The first was published before the coronavirus pandemic and the second was published during the pandemic. Do you think there is a continuing vital role for the Federal Reserve Bank in stewarding the economy?

b. In the second article, Dr. Hubbard states, “If the Fed doesn’t lose money, that says they weren’t lending to borrowers who needed the money.” Do you agree with this statement?

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