United States Economy
By Fareed Siddiqui
Inflation
Current
The United States has a very low inflation rate as in 2016 it was only 1.262%. This is well below the Federal Reserve's goal of 2% inflation. This low inflation rate means that the price of goods and the value of the dollar is very consistent. While this may seem like a good thing, the Federal Reserve is worried that this is too low. During the Recession, inflation plummeted to -0.356% in 2009 which is deflation because it is negative.
Government Policy
The United States Federal Reserve controls the national rate of inflation in many ways. One way is through controlling the printing of money which can impact inflation because of there is more money in the economy, the value of the dollar decreases due to deflation. Another way in which the Federal Reserve controls inflation is through changing the interest rates of banks which impacts the value of the dollar and can impact investments.
