Number: RL34562
Title: Slow Growth or Inflation? The Federal Reserve's Dilemma
Authors: Brian W. Cashell and Marc Labonte, Government and Finance Division 
Abstract: Although Congress has granted the Federal Reserve (Fed) broad operational independence, it retains oversight responsibilities to ensure that it meets its mandate. Congress has given the Fed a dual mandate to maintain maximum sustainable employment and price stability. A policy of pursuing maximum sustainable employment would also tend to minimize the upward and downward swings in the business cycle. Price stability refers to a low and stable rate of price inflation throughout the business cycle. At times, these goals can conflict. The current environment appears to be one of those times.
Pages: 10
Date: July 7, 2008