The assignment should be presented as a Journal opinion article and - 1

The should be presented as a Journal opinion article and address an economic issue of current interest to Wall Street Journal readers - Assignment Example There has been maintenance of the rate of federal rate by the Federal Reserve Bank where it has a standard short-term interest rate at near zero for over five years, even as the US economy has suffered a severe recession and slow recovery (Leubsdorf, 1). In March, there was an amendment on the Federal Reserve Bank advance direction on time that it may augment interest rates. Earlier, it had talked of 6.5 percent as had been stated in the threshold. However, it now awaits a significant time following the end of it bond-purchasing program, specifically if inflation is sustained at 2 percent. It is expected that the Federal Reserve Bank will end its bond-purchasing this year and the rates are expected to start rising next year (Leubsdorf, 1). According to the article, the rate of unemployment last month was 6.6 percent and descended from 7.5 percent last year. This information is from the Labor Department data. However, according to Mr. Rosengren, this is an underestimation of how severe the problem is. He argued that most individuals are taking part-time jobs as they cannot secure full-time employment, or have been searching for employment in the past year and have stopped in the last four weeks (Leubsdorf, 1). Inflation is below the target of the Federal Reserve Bank by 2%. Mr. Rosengren believes that it is hard to make estimates that are precise, especially because there has been a shift of economic activity since the recession, comprising the rate of household development, which is slow (Leubsdorf, 1). For the better part, the demand for goods and services is not connected to the interest rate of the market that is always stated in the newspaper, which is the nominal rate. However, it is connected to real interest rate that is as a result of subtracting the rate of inflation from the nominal interest rate. For instance, if one has a car loan