Update for investors - Since the onset of the global credit crunch in August 2007, the US Federal Reserve has resorted to a slew of innovative and sometimes unconventional approaches to dealing with the problems faced by distressed financial institutions.
The effort has been part of the Fed's attempt to stave off a full-fledged financial sector meltdown and to blunt the adverse impact of the ongoing disruptions on US economic activity. Despite the massive amounts of liquidity injected into the money market, it doesn't appear that the measures introduced will pose any significant inflationaary risks to the US economy.
Analysts don't believe that the Fed's ability to provide futher liquidity injections into the financial system is compromised by its current level of commitment. Should the Fed's cupboard become bare, there are several options that it can pursue to address any shortcoming it may face.
Ensuring stability in the financial markets has enormous implications for the economic wellbeing and prosperity for any society such that it becomes imperative for it be be pursued at reasonable costs.
Warmly,
Mary Wozny
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