Federal Reserve

The Fed has chosen to double down on an inflation-oriented framework for setting monetary policy. While there are some advantages in the current environment to an “average inflation targeting” scheme that affirmatively permits inflation to rise at least modestly past 2%, this approach is not particularly robust to a scenario

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.

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.