Unconventional Monetary Policy Tools of the Federal Reserve

The Federal Reserve System (the Fed) plays a crucial role in the United States economy by managing monetary policy, regulating banks, and providing financial services. In recent years, the Fed has utilized unconventional monetary policy tools such as quantitative easing (QE) to address economic challenges, particularly following the 2008 financial crisis. Additionally, its decisions can significantly influence interest rates, inflation, and overall economic growth.

Using specific examples, identify and explain two unconventional monetary policy tools used by the Federal Reserve. Discuss how these tools differ from traditional monetary policy measures and analyze their impact on the U.S. economy.