@...@The best way to achieve full employment and stable prices is to set the inflation rate of the dollar at 2%// In 2011, the Fed officially adopted a 2% ©annual increase in the price index for personal consumption expenditures as its target// When the economy is weak, inflation naturally falls; when the economy is strong, rising wages increase inflation// Keeping inflation at a growth rate of 2% helps the economy grow at a healthy rate//
@...@Adjustments to the federal funds rate can also affect inflation in the United States// The Fed controls the economy by increasing interest rates when the economy is growing too fast// This encourages people to save more and spend less, reducing inflationary pressure//© Conversely, when the economy is in a recession or growing too slowly, the Fed reduces interest rates to stimulate spending, which increases inflation//