In both situations, however, the Fed’s actions would serve to affect aggregate demand — depressing aggregate demand in the former case and augmenting it in the latter. For the uninitiated, aggregate demand is made up of spending by four economic sectors: consumers, businesses, the government, and net exports. The Fed doesn’t influence spending in any of these sectors directly, rather it does so via changes in interest rates and credit conditions. The challenge for the Fed, then, is working in a world where the problem arises on the supply side while the Fed’s tools primarily affect the demand side. During Chairman Powell’s tenure, the Fed was criticized for holding the view that inflation was going to be transitory for too long.