Explain why the FED cannot set intermediate targets in terms of both monetary aggregates and interest rates?

Monetary aggregate is a goal of money supply. Interest rate is a goal of a constant rate. To hold a specific money supply the interest rate would fluctuate. To hold a specific interest rate the money supply would fluctuate. So they can not work together.


Check this out and read 11.2 through 11.4

http://www.pitt.edu/~jduffy/econ280/lec1213.pdf