The Federal Reserve has policy instruments that it can aim directly at a specific category of asset price bubble.

Question

Quizplus · Accepted Answer

The Federal Reserve's policy instruments are not designed to target specific asset price bubbles. Instead, they focus on promoting price stability, full employment, and economic growth overall. It is difficult for the Fed to identify and target a specific asset price bubble without potentially causing unintended consequences in other parts of the economy.

The Federal Reserve Has Policy Instruments That It Can Aim