They control the quantity, but not how it is spent. They have, over the years, done alot to keep consumer price inflation in check (compared to the early years of the 20th, when 25% inflation or deflation was not uncommon). The thing is, the Fed is trying to fine tune things so that they can have their cake and eat it too. They want the economic and monetization benefits of running up the money supply, without any of the negative effects. It's just not possible. Sooner or later, the effects it has on the pricing mechanism (distortions in pricing between markets) come back to bite you in the ass (like with housing and the stock market, and the closing act of the oil bubble last summer).
The Rev