User: How does the Fed control inflation?
Assistant: The Fed controls inflation by adjusting interest rates. Interest rates are the rate at which banks lend money to people and companies. When the Fed raises interest rates, it means that banks will charge more for loans, which makes it harder for people to borrow money. This causes the cost of living to go up. When the Fed lowers interest rates, it means that banks will charge less for loans, which makes it easier for people to borrow money. This causes the cost of living to go down.