To lean into the winds of inflation, even taking the risk that the economy will fall flat on its face. To reinforce economic reasoning and bolster its strength when political spending dreams get out of hand.
These are two of the historic missions of the Federal Reserve, an always controversial, often misunderstood, sometimes misguided powerhouse.It has no set image. To some people, including the presidents who nominate its chairmen, it is an arrogant bully; to others, it is a nervous nellie, its worry-red eyes seeking economic dangers hidden from the perception of others.
In this regard, it has been accused of removing the punch bowl just as the fun begins - which is to say that at the height of the economic celebration it seeks to keep its head so that everyone can drive home safely from the party.
It reports to Congress, but some congressmen have railed against it and had no impact at all. It keeps secrets; rarely is there a leak of inside discussions. And seldom does it explain its moves in great detail.
Oddly, the Fed's reticence gets it more space in the media than almost any member of Congress or any Cabinet officer could command. It also is the subject of endless speculation in the investment and political communities.
Generally, it maintains an intellectual aloofness from political assaults. On the other hand, it has been accused again and again of timing its economic moves to help re-elect the incumbent party - of creating election year booms.
The Fed thus has many faces and many images at different times, but not now. Seldom has its mission been more explicit: It is going to face down the threat of inflation by slowing the American economy's growth rate.
Moreover, it intends to get the job done before inflation does work its way into the economic marrow. Not forgotten is the 1970s experience, when the Fed, for whatever reasons, allowed inflation to gather such steam it took the highest interest rates of the century and a deep recession to stop it.
As usual, it has supporters and dissenters, and sometimes the two are combined. Wall Street is said to gain confidence from the Fed's position on inflation, but some of those Wall Streeters are attracting the money of clients with forecasts of economic growth much higher than that prescribed by the Fed.
Many people, including respected economists and even President Bush, feel the inflation danger is overstated. By his actions as chairman, Alan Greenspan couldn't disagree more; relentlessly, he has forced up interest rates.
Such action, it often is contended, threatens to replace one danger, inflation, with another, recession. Judging by its actions, the Fed agrees that there are indeed two dangers, and that recession is the more acceptable.
So far, the Fed's anti-inflation policy not only hasn't stopped the economy in its tracks but hasn't been able to slow the growth rate to a target of only 2.5 percent or thereabouts. Many economists still expect growth of 3.5 percent this year.
As the Fed seems to view the situation, growth at 3.5 percent would so stress on the nation's plant capacity and labor force - in both instances compelling the use of the least efficient of each - that price increases would follow.
But critics, as there always are when the Fed is involved, contend that by raising interest rates the Fed will force companies to forego investments in greater plant capacity and more efficient technology and methods.