We report to the Congress, and, through the Congress, to the American people. The laws under which the Federal Reserve operates set out a variety of goals, all of which come down to our having a mandate to promote sustained economic growth. We are, therefore, in the business of promoting growth and especially the creation of jobs. What we can do is provide an environment of price stability as the means to achieve our goal of sustained economic growth. Stated in negative terms, we avoid creating a financial environment in which resources are so stretched that inflation increases, which inevitably leads to an economic slowdown or recession.
Some central banks have an inflation target, a numerical goal.
In my view, we are in a period of price stability. I assure you that, as the Vice Chairman of the Federal Open Market Committee, the monetary policy committee of the Fed, I will do everything in my power to keep us on the path that has served our economy so very well over recent years. It is, in fact, very direct. The poor live basically on low, fixed incomes, such as welfare payments and relatively low-paying jobs. If inflation picks up, they have no power to increase their incomes and so they lose purchasing power as price increases accelerate.