But, with liquidity provided by the Federal Reserve, loans to borrowers who met the tighter standards continued to flow. The U.S. economy continues to face challenges, but I am convinced that the forceful actions of the Federal Reserve in 2008 helped prevent what might have been a far worse scenario. The Federal Reserve was originally created to guard against financial panics.
But in modern times, many people think of its primary role as responsibility for monetary policy. The Congress has given the Federal Reserve two objectives, known as our dual mandate, to foster maximum employment and price stability.