In March of 1994, Paul Solman simulated a meeting of the Fed’s inner sanctum, the Open Market Committee, with former Fed members. The segment aired on March 23. The day before, the FOMC voted to raise short-term interest rates for the second time in two months. The Fed voted Wednesday to taper their purchase of mortgage-backed securities and Treasury bonds by $5 billion each.
Watch Paul’s 1994 segment to understand the considerations that go into making these policy decisions, and watch his segment from earlier this week, below, to understand how current economic conditions factored into their decision to begin tapering in January 2014.
This entry is cross-posted on the Making Sen$e page, where correspondent Paul Solman answers your economic and business questions