The Federal Reserve plays a crucial role in managing the US economy through its monetary policy tools. During periods of economic uncertainty, the central bank has often resorted to unconventional measures to address challenges related to unemployment and inflation. This research aims to empirically investigate the effectiveness of the Federal Reserve's unconventional monetary policy tools in mitigating the impacts of economic uncertainty on unemployment and inflation. While it is acknowledged that the Federal Reserve's quantitative easing program likely played a vital role in stabilizing the economy during the financial crisis by providing liquidity to stressed financial markets, our estimates suggest that the unconventional policy actions taken by the Federal Open Market Committee (FOMC) did not provide substantial additional monetary policy stimulus during the initial two years following the financial crisis. This outcome can be attributed to several factors, including relatively modest changes in policy expectations during that period, the anticipation that the economy would recover more swiftly than it ultimately did, and the inherent time lags in the transmission of monetary policy.

Unconventional Monetary Policy, Unemployment, Inflation, USA