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b. What does the FOMC hope will be the result of using this toolin a...

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Economics

b. What does the FOMC hope will be the result of using this toolin a situation when the inflation rate is well above the Fed'starget rate? A. The Fed is trying to influence expectations aboutinflation and hope that individuals will behave in a way consistentwith that expectation. B. At the zero lower bound, forward guidanceis the only tool the Fed has to significantly lower inflation. C.Using this tool signals the lack of other tools the Fed can use tolower inflation, indicating to everyone just how bad inflation isat that moment. D. In an ample-reserves regime, forward guidance isthe only tool the Fed has to significantly lower inflation.

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