Question

n​ mid-2017, an article in the Wall Street Journal noted​ that: ​"The Federal​ Reserve's interest-rate increases​ aren't having the desired effect of cooling off Wall​ Street's hot streak...where stocks have rallied to records this​ year..." ​Source: David​ Harrison, "Fed's Effort to Guide Markets​ Falls," Wall Street Journal​, June​ 11, 2017. Is cooling off rapid increases in stock prices part of the​ Fed's dual​ mandate?

Answer 1

No

Step-by-step explanation:

When Congress enacted the Federal Reserve Act in 1913, they stated the FED's mandates:

1. promote maximum employment
2. promote stable price

The FED's main objective is to conduct monetary policy in order to stabilize the economy and promote economic growth.

By stabilizing the economy the FED will lower inflation rate, therefore stabilizing prices. When the FED promotes economic growth, the unemployment rate should decrease, hopefully reaching a full employment.