FOMC Meeting

Paper Summary:

This research paper is based on a meeting held on November 6, 2001, by the Federal Open Market Committee. It explains that the committee discussed the decline in consumer and business spending worldwide and decided to ease its policy in order to give a boost to the economy.

From the Paper:

"The Federal Open Market Committee of the Federal Reserve System held its scheduled meeting on November 6, 2001. After the terrorist attacks and in the wake of the U.S.-Afghanistan war, the FOMC discussed a major weakness in aggregate demand world over, but primarily in the United States. The committee was optimistic about an upturn in the long run; however, the economic circumstances at the time showed a dreary picture. In spite of this, consumer spending remained fairly stable but was expected to decline in the near future due to job losses immediately following the September 11 attacks on the World Trade Center. The whole economy (of the entire globe, one may add) was highly disrupted at the time and it was thought that consumers may not be able to keep up with their expenditures as they would lose consumer confidence due to unemployment and bad business conditions which were in turn making people more cautious about investment. In such uncertainty it was considered likely that although the consumer expenditures may remain steady for a time, they would eventually fall to rise again perhaps in the year 2002."

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