Why does the...?

Question

Federal Reserve care about the difference between Deflation and Disinflaton??

Answer 1

The Federal Reserve do care about the two items you talk about. That is why for the past two sequesters of the FOMC they didin't raise the interest rates. Chairman has spoken about a soft landing where the economy won't go into a recession when Fed pursues policies to contain inflation. If they don't try ot regulate inflation then the pepople like you who stay there can loose your purchasing power and your pay may not be sufficient to pay for all the bills in future. They also cannot let it cool off to a state the economy stagnate to levels you talk about since that can cause unemployment and then stagflation. Or they cannot overheat the economy by overemploying resources at a faster rate than what the environment can sustain at a given point in time. Considering all this I believe the Fed is capable and is doing everything in its power to target the economy in the right trajectory or course. Only thing is everyone living there should not loose heart over what they do and make it difficult for the Fed to do their job effectively. Even the companies usually and should comply to ther regulatory and political needs of the Economy. They usually do and hope this time around also they do.
Former consultant to Fed Reserve, USA.

Answer 2

to make the democrats scream.