Federal Reserve

What are three policy changes that would make the Federal Reserve’s job of controlling U.S. interest rates easier. Explain your reasoning.

1) Increased daily transparency would take the pressure off interest rate changes by making them less of a surprise when the FOMC announces policy changes.

Since the purpose of controlling interest is a defense to inflation and recession, policies that limit those events reduce the frequency of radical interest rate movements. The next two suggestions would fall in that category.

2) Deciding beforehand what is the largest size institution that is deemed too big to fail, limiting their growth to that size then letting them fail.

3) Repealing the changes made to the Glass–Steagall Act in 1999 (sometimes called Gramm-Leach) that prohibited banks from many of the activities that led to the 2008 financial meltdown.