Federal Reserve's Fiscal Priorities

The Fedearl Reserve by law is required to keep prices stable and maximize employment. Many lawmakers, especially the Republicans, want to strip the Feds regarding the employment mandate. In order to keep the prices stable, the policymakers set inflation targets at the unofficial level of 2 percent or lower. In recent days, there is a variant to inflation-targeting mechanism floating around in fiscal circle. The variant, known as price-level targeting, was espoused by a small, but growing, circle of economists, among them is Chicago Fed President Charles Evans. The price-level targeting mechanism allows inflation to run a bit higher to make up for inflation too low today and policymakers to aim and address the long-term average.