The Fed has two primary objectives for monetary policy—maintaining low inflation and supporting employment growth consistent with low inflation. So, the Fed is mainly concerned with inflation and factors that portend inflationary pressures but also employment and unemployment.  Fed officials generally believe that a stable, low inflation environment is most conducive toward healthy employment growth. The Fed determines whether to ease or tighten credit conditions based on economic and inflationary conditions.

 

Fed policymaking is complicated, much more so than indicated by the charts in this section. However, these charts do depict the current focus of attention by Fed officials.