The Fed uses the short-term interest rate to either promote growth or fight inflation. The government has other methods to do this using fiscal policy and some MMT economists argue that the Fed should freeze interest rates at 0 and use fiscal policy instead for promoting growth by more fiscal spending or fighting inflation by raising taxes. If the free market was to determine interest rates without central bank intervention it would probably prefer growth and not fear inflation as growth benefits the market and companies and wealthy investors would offset inflation by rising prices and holding real assets. High inflation would lead to instability so it probably does make sense to have a government role in managing the economy to prevent instability.
The Fed uses the short-term interest rate to either promote growth or fight inflation. The government has other methods to do this using fiscal policy and some MMT economists argue that the Fed should freeze interest rates at 0 and use fiscal policy instead for promoting growth by more fiscal spending or fighting inflation by raising taxes. If the free market was to determine interest rates without central bank intervention it would probably prefer growth and not fear inflation as growth benefits the market and companies and wealthy investors would offset inflation by rising prices and holding real assets. High inflation would lead to instability so it probably does make sense to have a government role in managing the economy to prevent instability.