Is it more important for the Fed to concern itself with steady growth without inflation or...

Is it more important for the Fed to concern itself with steady growth without inflation or should it work to increase the growth rate at the cost of more economic swings/volatility?

Expert Solution

It is more important for the Fed to lead to an increase in the market with steady growth without inflation and not in a growth of economic swings and volatility because if the growth in going steadily then the investors will have more faith on the Fed and in case of downturn they will depend in the Fed to improve the situation, this will ensure a better long term growth.

If there is already some volatility in the market then investors will panic in economic downturn and that could lead to deeper trouble or even minor downtrun can turn into full recessions.

Rahul Sunny answered 2 years ago

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