Countercyclical monetary policies refer to the Federal Reserve’s responses when they perceive a warning economic activity. If the country’s economic growth is unstable, the government will attempt to boost the output and employment level in the economy by increasing the money supply. On the contrary, if inflation is perceived to be accelerating, the Federal Reserve will pressure interest rates and open market operations to restrict the economy’s collection and growth. However, the government has not been entirely effective in moderating business cycle swings despite using monetary policy tools (Kliesen, 2013). It is evident due to the financial crisis that impacts national and global economies regardless of the counter cynical monetary policies. It implies that the Federal Reserve lacks more significant margins within the policies to prevent and address the economic shocks. The onset of the financial market crisis
