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The Fed's target rate aims to balance economic growth with inflation control.
Lower rates spur growth but risk higher inflation. Higher rates curb inflation but can slow the economy.
The optimal rate is sensitive to market conditions and economic indicators.
Employment levels significantly influence the Fed's interest rate decisions.
Keeping inflation at manageable levels is a key goal of rate adjustments.
Global economic conditions also affect the Fed's interest rate decisions.
The Fed adjusts rates based on historical data and future economic projections.
The optimal rate isn't static; it changes with economic trends and fiscal policies.
Economists often debate the ideal rate, reflecting differing economic philosophies.