A newspaper headline reads: "Fed Raises Discount Rate for Third Time This Year." This headline indicates that the Federal Reserve is most likely trying to:

Question

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The increase in the discount rate is a tool used by the Federal Reserve to reduce inflationary pressures in the economy. By increasing the cost of borrowing for banks, the Federal Reserve disincentivizes banks from lending out money too freely, which can lead to inflation. So, the headline suggests that the Federal Reserve is taking action to try to keep inflation in check.

A Newspaper Headline Reads: "Fed Raises Discount Rate for Third