Tight monetary policy is a strategy used by central banks, like the Federal Reserve, to control inflation and stabilize the economy. This approach involves raising interest rates and reducing the money supply, making borrowing more expensive. As a result, consumers and businesses may spend less, which can help slow down rising prices. By implementing tight monetary policy, central banks aim to prevent the economy from overheating. This can be particularly important during periods of rapid economic growth when inflation may become a concern. Ultimately, the goal is to maintain a balance between economic growth and price stability.