First, the Federal Reserve should try to be as neutral as possible with respect to effects on credit and, ultimately, on resource allocation. The market can do this far better than we can. The role of monetary policy is to promote price stability and maximum sustainable employment by influencing the level of aggregate demand through changes in the federal funds rate.
In carrying out this responsibility, the Fed should aim to have as little effect as possible on the allocation of credit among various sectors or the allocation of resources more generally across industries or sectors. Second, and closely related to the first point, the Fed does not want to risk facing political pressure to influence the allocation of credit or resources.