The Federal Reserve's interest rate decisions shape the economic landscape, influencing borrowing costs for everything from mortgages and auto loans to business investments. These policy changes directly affect whether businesses expand operations, invest in equipment, or increase staffing. At Employ America, we research how the Fed can better balance its dual mandate, advocating for approaches that prioritize achieving and sustaining full employment while utilizing more targeted tools to address inflationary pressures.
Monetary Policy

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Tariffs are back. With President Trump implementing and still proposing sweeping new import tariffs, the U.S. economy is staring down the barrel of policy-driven price increases and a new round of supply-driven cost-push inflation. If enacted for a long enough period of time, these policies could push up the
The Federal Reserve began the process of normalizing interest rates at the September 18th, 2024 FOMC meeting. While the timing of the first rate cut was telegraphed well in advance, the magnitude—25 or 50 basis points—was not. A week prior to the meeting, market pricing, as well as
We will be hoping for two things at the September meeting this week: a 50 bps cut and minimal upwards revisions to the unemployment rate projections in the Summary of Economic Projections (SEP).
We see two individually sufficient conditions for the Fed to proceed with a frontloaded interest rate cut in September above 25 basis points: either (1) the unemployment rate is 4.2% or above, or (2) the prime-age 25-54 employment rate declines in both month-over-month and year-over-year terms. Back when we
Almost as notable as the things Powell said were the things he did not. Between now and September, Fedspeak should focus on keeping the Committee’s options open to a 50 bps cut in September.
When it comes to the Fed policy today, the question of whether or not these rules are good at telling us if we’re currently in a recession is almost besides the point.
By delaying rate cuts in search of certainty, the Fed risks being behind the ball. The FOMC should actively keep the option of a 50 basis point cut on the table between now and the September meeting.
This article is intended to serve as a follow-up to the #FloorGLI proposal in “Floor It! Fixing the Fed’s Framework With Paychecks, Not Prices.” The official national accounts estimate of gross labor income (GLI) is based on the Quarterly Census of Employment and Wages (QCEW), but because of sharp
Fire prevention—rather than fire fighting—is a better approach to risk management when it comes to the labor market. When it comes to unemployment risk, the Fed should be proactive and preemptive, not reactive.