The Fed has to strike a delicate balance to ensure low, steady prices while setting a course for an economy that encourages everyone to get a job who wants one.
"There's an inherent conflict in trying to keep prices down," Danielle DiMartino Booth, founder and CEO of QI Research, told CNBC. "It's impossible to maximize employment and not ignite price pressures."
For example, if prices are too hot, the Fed may vote to raise interest rates to influence a decrease in borrowing. However, when rates are low then businesses are more likely to create more jobs while money is cheap to borrow, according to the International Monetary Fund."Over the long run, it would be better if they were to, in my opinion, only focus really on price stability and therefore give people confidence that their purchasing power would remain intact," Thomas Hoenig, former president of the Federal Reserve Bank of Kansas City, told CNBC.
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