Final answer:
Since 1993, the Federal Reserve has set targets for the federal funds rate to manage the economy and strive towards price stability and high employment.
Step-by-step explanation:
As of 1993, the Federal Reserve, often referred to as the Fed, has primarily set targets for the federal funds rate in an effort to achieve price stability and high employment. The federal funds rate is the interest rate at which depository institutions trade federal funds (balances held at Federal Reserve Banks) with each other overnight. The Fed influences this rate through open market operations, which involves the buying and selling of government securities. This targeting helps manage the economy by influencing other interest rates, which in turn affect borrowing, spending, and investment, thereby helping to control inflation and unemployment.
It's important to note that the Fed also discusses and can change other tools of monetary policy, such as the discount rate and reserve requirements. However, since the 1990s, the focus has largely been on targeting the federal funds rate. Adjusting this rate is a primary method the central bank uses to navigate between its dual mandates of fostering economic growth and containing inflation.