Question 2. Explain the Federal Reserve’s current view about inflation Things th

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2. Explain the Federal Reserve’s current view about inflation

Things that will help you.

The Federal Reserve offers to the general public numerous publications available at the website of the Federal Reserve Board,

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The Federal Reserve Board testimonies, press releases, monetary policy reports, the Beige Book, and a variety of other publications offer a detailed assessment of current economic activity, financial markets, and the monetary policy tools used to promote economic activity and preserve price stability.

Explanation / Answer

According to the FED, inflation is not a danger. Deflation remains the current concern. As long as inflation remains under or near the target rate of 2% and no asset bubbles develop, liquidity will be provided and the fed funds and discount rate will remain near 0%.

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