What role(s) do the Fed play in the US economy? What the role of monetary policy is in creating inflation and deflation, and what their economic consequences are? What relationship exists between inflation, the output gap, and monetary policy? Article: The Federal Reserve resumed lifting interest rates Wednesday with a quarter-percentage-point increase that will bring them to a 22-year high. Fed Chair Jerome Powell said it was too soon to tell whether the hike would conclude a series of increases aimed at cooling the economy and bringing down inflation. The central bank would decide whether to keep lifting rates based on how the economy fares in the months ahead, "with a particular focus on making progress on inflation," he said at a news conference. The unanimous decision to raise the benchmark federal-funds rate to a range between 5.25% and 5.5% follows a brief pause in increases last month. It marks the 11th rate rise since March 2022, when they lifted rates from near zero. Markets were mixed after the Fed decision. The S