As part of its response to the global financial crisis, the Fed lowered the federal funds rate target to nearly zero by December 2008 and quadrupled the monetary base between 2008 and 2017, a considerable easing of monetary policy. However, survey-based measures of five- to ten-year inflation expectations remained low throughout most of this period. Comment on the Fed’s credibility in fighting inflation.

To maintain a healthy economy, the Fed, as the country's monetary policy authority, influences the availability and cost of money and credit. The Fed has two coequal monetary policy goals: maximum employment and stable prices, which means low, stable inflation.

The FOMC hastened its interest rate decreases as the financial crisis and economic contraction worsened in the fall of 2008, bringing the rate to its effective floor – a target range of 0 to 25 basis points – by the end of the year. The Fed unveiled the $200 billion TALF in November 2008. This programme facilitated the issuing of asset-backed securities (ABS) secured by vehicle, credit card, education, and small business loans. This move was taken to alleviate concerns about liquidity. The Federal Reserve reacted quickly to the financial crisis that erupted in the summer of 2007, implementing a number of programme to help financial institutions maintain liquidity and promote improved financial market conditions.

When inflation becomes too high, the Federal Reserve usually hikes interest rates to slow the economy and reduce inflation.