Since its creation in 1913, the Federal Reserve's role has been tweaked and altered depending on the country's needs at the time. At this point in history, the Fed has only two jobs for official purposes. As stated on the Fed's website:
The Congress established the statutory objectives for monetary policy—maximum employment, stable prices, and moderate long-term interest rates—in the Federal Reserve Act.
In English, the Fed's goal is to pump enough money into the system to promote job growth without going so far as to create inflation. Despite constant complaints to the contrary, most evidence supports the idea that the Fed has managed to avoid inflation, at least on a nominal basis.
What the Fed hasn't done is create many, if any, jobs. Lee Munson, founder of Portfolio LLC and author of Rigged Money, says the lesson of the last few years of QE and other stimulus is that neither the Fed nor anyone else can do much, if anything, to eliminate the employment cycle.
The Fed's Job Creation Myth
You can't do anything about labor, says Munson in the attached clip, and "floating another $40 billion into the system is not going to help employment." This was one of the points in the argument against the round of stimulus announced by the FOMC last month. Even taking Bernanke's claim (that Fed policy created two million jobs) at face value, the cost per job is appalling: over one million per job if you divide those two million jobs by the cost of QE1 and QE2.Read More »from The Fed’s Job Creation Myth and the New Moral Hazard