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Question 1
Read this press release from the Federal Reserve, and then answer the questions that follow.

Part A
Which Federal Reserve group is acting in this situation?

Part B
What decreased during this period?

Part C
What is the target range for the federal funds rate?

Part D
What inflation rate is ideal in this situation?

Part E
The text states that the Committee “expects inflation to rise gradually toward 2% over the medium term as the labor market improves further….” Why would the FOMC expect inflation to rise because of improvements in the labor market?

Part F
The text states, “The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen further improvement in the labor market….” Why would the Committee raise the federal funds rate as the labor market improves?