when inflation is , the fed aims to slow the economy.

The Federal Reserve aims to slow the economy when inflation is too high by raising interest rates. Raising interest rates makes borrowing more expensive, which slows consumer spending and business investment, thereby reducing economic activity and helping to bring inflation down. This approach is part of the Fed's mandate to maintain price stability and achieve a target inflation rate, usually around 2% annually. When inflation rises above the target, the Fed typically increases the federal funds rate to slow down the economy and control inflation. Conversely, if inflation is too low or the economy is slowing, the Fed may lower rates to stimulate growth by making borrowing cheaper. The Fed balances its dual mandate of controlling inflation while promoting maximum employment through these interest rate adjustments.