Formal data don't tell policy-makers everything they need to know about the economy. The Federal Open Market Committee also pays attention to anecdotes gathered from the front lines of business.

Conventional wisdom holds that if policymakers are too focused on controlling inflation, then employment, output growth and financial stability will suffer. But the conventional wisdom is wrong, according to the data.

The low and stable inflation that the Fed has relentlessly pursued over the past decade or so has buoyed virtually all demographic groups, enabling most Americans to do a lot more than just keep their heads above water.