What are the goals of the Federal Reserve and how does the Federal Reserve attempt to control inflation? Why is low and steady inflation important?

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Goals of Federal Reserve
Through monitory policy, the Federal Reserve aims to promote and create a better and stronger economy in the United States. The Federal Reserve conducts monitory strategies with an aim to support three goals. The first goal is to ensure that there is maximum and sustainable employment in the country. Federal Reserve has the mandate to provide that there are viable employment rates at the highest level which can be sustained in by the current economy while at the same time ensuring there are stable inflation rates. The second aim is to provide that there are stable prices in the market. While both the consumers and the business owners are not worrying about falling and the rising prices are when prices are considered to be stable. When there are stable prices, the long-term interest rates will be at moderate levels. The price stability and long-term interest rates go together. The last goals are to ensure that there is moderate and long-term interest rate (Rosengren and Eric, 23). Usually, these goals are referred to the Fed’s mandate. Through influencing the monitory policy mandates and the general financial conditions, the Federal Reserve can achieve its monitory policy mandate.
How does Federal Reserve control inflation?
Controlling inflation and avoiding recession is the primary job of Federal Reserve. The Federal Reserve can achieve this through monetary policy. By the use of contractionary monitory policy, the Federal Reserve can control inflation by reducing the rate of economic growth.

There will be an excess demand which can generate inflation when the gross domestic product grows at a rate more significant than the ideal percent. When there is more growth rate than the perfect percent, the prices of few commodities will go up. By tightening the money supply, the Federal Reserve can slow this growth thus controlling the credit amount allowed into the market. The Federal Reserve also reduces the liquidity in the financial system which makes it more expensive to acquire a loan (Rosengren and Eric, 45). This will result in slowed economic growth and demand which results in more pressure on prices.
Why is low and steady inflation important?
Low and steady inflation rates are important in keeping a stable economy. It helps to encourage saving and investment which results in rapid and stable economic growth thus encouraging the competitiveness of a country in the international market. In many countries, 2% is considered as the most stable target of the inflation rate. This rate is usually low but moderate at it is the best in compromising between while avoiding the cost of inflation and avoiding the costs of deflation. In a low and steady inflation rates, companies will be able to predict future prices and cost of commodities which will encourage investments. It will also ensure that that investors do not see fall in the real value of their saving(Rosengren and Eric, 60). Additionally, low and steady inflation increases competitiveness and countries will be able to export relatively more competitively. Lastly, it helps to avoid boom and bust cycles. Usually, high inflation rates are unsustainable. Also, high inflation rates have more cost like the menu costs which is the cost of changing the price lists. Through low and steady inflation rates, a country can minimize the cost of products by changing the prices lists which allow customers to shop at the lowest prices.
Reference
Rosengren, Eric S. Observations on defining the objectives and goals of supervision: remarks at the Federal Reserve Bank of New York’s Conference,” Supervising Large, Complex Financial Institutions: Defining Objectives and Measuring Effectiveness”, March 18, 2016. No. 104. 2016.