These days we hear so much about the Federal Reserve and monetary policy.
“Inflation, interest rates…blablabla?”
But what exactly is monetary policy? And why do we have one?
The Fed has lifted rates six times since December 2015.
The Federal Reserve held interest rates steady on Wednesday and acknowledged rising inflation in its monetary policy. The gradual pace of rate increases is part of the the Federal Reserve’s monetary policy.
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According to New York Times, “Data released on Monday showed that wages and prices are now growing at 2 percent a year, according to the Fed’s preferred inflation measure, the personal consumption expenditures price index. Excluding volatile food and energy prices, the rate is 1.9 percent. Those levels indicate inflation is finally reaching the 2 percent target after six years of failing to meet that goal.”
The Fed is midway through what is meant to be a long and gradual push toward historically normal rates.