I won’t get into too many details of what that term “monetary stimulus” means, although I’m more than happy to take questions about it later. For now, I’ll just note that when the FOMC changes the level of stimulus, our actions tend to push inflation – that is, the rate of growth of prices – and employment in the same direction.
Raising the level of stimulus puts upward pressure on both inflation and employment. Lowering the level of stimulus puts downward pressure on both inflation and employment. I can now turn to the main theme of the remainder of my speech: the goals that the FOMC seeks to achieve by varying the level of monetary stimulus.