Federal Reserve explained....(for beginners)

The Federal Reserve aims to maintain price stability, maximum sustainable employment, and moderate long-term interest rates.

With price stability as the number one concern, we have bumpy roads ahead with the ongoing banking crisis. Let's see if we can reach this 2% inflation rate target.

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[laurabutler]

Thank you for sharing your studies with us❤

[markcrawford]

No inflation decreases the value of the money.

[Basta]

Absolutely not, a stable inflation rate doesn’t preserve the purchasing power of your money. Just imagine if you had a million in cash in a briefcase from 20 years ago. Its value has certainly dropped by 50-75%.

It’s more that the inflation rate is stable so that you can make plans with that money. If you know that inflation will be a stable 2-3%, you know to invest the money in assets that retain their value or grow in value but also keep some in cash for the needs of the next 2-3 years.

[Pabeanz]

so many questions. I just don't fully understand how/why the Fed Reserve exists now and how/why inflation is a thing (like how did it start and why?). I understand the idea of inflation and the value of the dollar. But, the "how" and "why" parts seem to go over my head sometimes.

[TheLethargicAge]

Bailing out the banks and making sure the gov’t can borrow cheaply are the Fed’s true mandates. Perpetuating the myth of deflation is another one.

Deflation is kryptonite for a debt-based monetary system like ours because it makes it impossible to inflate the debt away. That’s the real reason they want to avoid it at all costs.

[TheWorldBelow]

Stable price rate increases while the value of your Time heads towards crapper

[markcrawford]

No inflation decreases the value of the money.