However, its success as a social contract is only possible because it is rooted in a second accord, a constitutional contract, between the citizens who own it and the institution to which they have assigned the task of protecting it. The recognition that the management of the currency, being a policy function, requires a constitutional backing is not exactly new.
After its most recent meeting in March, the Federal Open Market Committee (FOMC) modified its forward guidance to say that an increase in the target range for the federal funds rate will be appropriate when the Committee has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term.