In Brief: The Fed's Inflation Fight (with Greg Ip)
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The Federal Reserve and Why Do We Care?
The federal reserve is or central bank. They are basically in charge of making sure that the purchasing power of our money is not eroded by inflation overtime. Over time, they've concluded that two % is a better number than zero % as a long range goal. With an inflation rate of two %, they can actually lower the interest rate to zero and have a real interest rate of negative two % if the economy really needs a lot of help.
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