The balancing act: US recession 2020 and the Federal Reserve

Abstract

Abstract. The paper shows that there is a tradeoff between higher wages and higher employment when Federal Reserve through its monetary policy tools is trying to avoid a looming recession. The paper also explains the rationale behind President Donald Trump’s industrial policy and timely actions by the Fed to raise interest rates by presenting it not as contradictions but as conciliation measures.  The paper utilizes unique perception based data collected by world economic survey on some key indicators of the US economy to discuss a strong possibility of mild economic recession in 2020 in the US. However, it is expected that the Federal Reserve would take some timely measures like the devaluation of US dollar and decreasing interest rates that may off set the drastic effects of a continuing trade war with China on the external sector of the country. The economic policies of Trump administration have brought greater focus to industrial labor that has strengthened the white supremacy rhetoric in the country. The concept paper discusses specific activity based informal education exercise in the schools in US that may help the young population in the country to consolidate with diversity and reject populism of dissent against diversity and movements of white supremacy.

Keywords. Federal Reserve, Balancing act, US recession.

JEL. A14, B24, B51.