The Fed expands and contracts the money supply to keep inflation around 2%. They use it as a tool to smooth out financial expansions and contractions by affecting interest rates which affect the demand for money vs interest bearing holdings.

Currently, they expanded the money supply past demand to accommodate the 2008 crisis and now we are caught in a liquidity trap. If the Fed now wants to stimulate the economy by lowering the interest rate though expanding the money supply they can't, because the interest rate is at the lower bound of 0%. They need to now use less effective and unconventional methods to affect the economy.