Explain how and why the federal Reserve Bank would act to either stimulate or slow down the Us Economy. You can use current conditions and their actions over the past 5 years as examples.

The Federal Reserve acts to stimulate or slow down the economy is by utilizing open market operations. To stimulate the US economy, the Fed would purchase bonds from the Treasury, which would increase the money and credit in the economy. To slow down the US economy, the Fed would decrease the money and credit in the economy by selling bonds to the Treasury. In recent years, the Fed has chosen to expand with whom it purchases and sells assets to to include financial institutions. It has also increased the scope of assets to include other financial assets. This has been called QE or quantitative easing and has been a popular strategy since 2008. The purpose of utilizing QE as opposed to usual open market operations is because in a low interest rate environment, the impact of monetary policy might be reduced.