The European Central Bank, The Federal Reserve System and the Challenge of Inflation

Abstract

Worldwide, inflation is one of the most used terms when discussing the economy and beyond. Inflation is the indicator that governments, the population, financial entities, investors and not least monetary authorities are interested in. Since central banks have price stability as their main objective or not, they act through monetary policies when necessary. Monetary decisions in the Eurozone and the United States - as financially important regions - influence other economies. This paper focuses on the study of the evolution of the inflation rate in these two cases because of the importance of the subject. It will be found that inflation can also be a challenge for these large financial entities – Federal Reserve System and European Central Bank.

Keywords

• central bank
• inflation rate
• fed
• ecb