Consider the following scenario. The FOMC, having established its credibility for fighting inflation, has requested that its staff produce the most accurate forecast of inflation possible over the next six quarters. They are interested in a forecast that takes into account all known factors that determine inflation and will help the FOMC make the best decision regarding the federal funds target rate. The appropriate loss function is: Asymmetric with higher penalties for forecasting inflation that is too high Symmetric with equal penalties for forecasting inflation that is too high or too low Asymmetric with lower penalties for forecasting inflation that is too high Symmetric with higher penalties for forecasting inflation that is too low