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
Read the Latest
Read the Latest
59 Posts
Jul 29, 2020
Here, we discuss six potential improvements to the Evans Rule that the Federal Reserve (Fed) should consider as it formulates its forward guidance strategy in response to the COVID-19 economic crisis.
Jul 28, 2020
By Skanda Amarnath & Sudiksha Joshi While the Federal Reserve (Fed) cannot unilaterally deliver a swift recovery from the COVID-19 economic recession, it can still play a useful supporting role through its commitment to keep interest rates low. The Fed faces the same zero lower bound (ZLB) constraint that it
The Fed now recognizes that its interventions have helped to create millions of jobs and promoted a better equilibrium in the long run. A deeper shift to its reaction function is now needed.
Whether you’ve been converted to #FloorGLI or you stick to the Fed’s preferred methods for framing economic developments, the case for the Fed to cut 50 basis points at the June FOMC meeting is underrated.
The Federal Reserve should revise its framework to achieve at least a floor rate of gross labor income (GLI) growth, as opposed to simply tweaking its existing strategy of targeting consumer price inflation.
