The Federal Reserve System sets policies that facilitate economic and financial activities with the intention of achieving maximum employment, stable prices, and moderate long-term interest rates. Companies must review and assess the impact of Fed policies to their long-term financial planning. Understanding and incorporating these policies into their financial strategic planning is necessary for a company to be successful.
In the final project for this course, you will select a Fortune 500 firm for which you will assume the role of chief financial officer (CFO). Given the scenario provided in the prompt below (detailing recent actions taken by the Federal Reserve), you must perform an investigation and analysis for the firm’s board of directors. Specifically, you will need to profile your organization, explain the role of the Federal Reserve to your audience, analyze the particular impacts of the recent Fed actions to capital markets, and put together appropriate recommendations to improve your firm’s financial position, as well as protect it from financial risk. The product of your inquiry and evaluation will be compiled into a capital markets case report.
The project is divided into three milestones, which will be submitted at various points throughout the course to scaffold learning and ensure a quality final submission. These milestones will be submitted in Modules Two, Four, and Seven. The final project will be submitted in Module Nine. In this assignment, you will demonstrate your mastery of the following course outcomes:
Interpret macroeconomic events through the lens of firms’ strategic objectives to determine their likely impacts to capital market conditions
Utilize tools of risk management to accurately identify and effectively balance risk and return in corporate management and portfolio management
Evaluate the role of the Federal Reserve System in driving macroeconomic events that influence capital markets
Develop strategies for ethically improving the financial position of corporations based on sound assessments of capital market opportunities
Prompt
In your capital markets case report, respond to the following scenario: Imagine you are the chief financial officer (CFO) of the Fortune 500 company you chose in Module One (JPMorgan Chase & Co., AT&T, or Qualcomm). Given
the positive macroeconomic trends, including improvements in labor market conditions, the Federal Reserve recently increased the federal funds rate. With the continued improvement in economic outlook, the Federal Reserve is poised to increase the federal funds rate again in the near future. The Fed believes that with the gradual increase in monetary policy, the economic activities and labor market will strengthen and inflation will remain consistent. As the CFO of your company, you must analyze and evaluate the likely impacts of the aforementioned Federal Reserve monetary policy actions to the wider economy (and specifically, to capital markets), as well as the resulting implications for your firm. Based on your assessment, you will put forth various recommendations to the company’s board for improving their financial position while safeguarding against corporate risk.