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Powell or Brainard Will Struggle to Align Hikes With Hiring Goal

edited November 2021 in Other Investing
Perhaps some portion of the population that "retired" during the pandemic will stay retired long term. And, perhaps some younger people who were previously in dual worker households and who opted out of the labor force during the pandemic will remain at home long term thereby causing the the number of single worker households to increase. I suspect both of those changes in the composition of the workforce may be happening. Those issues will factor into the Fed's decision about when to start raising interest rates. That decision will also need to wrestle with the Fed's maximum employment mandate:
Complicating the decision-making and posing a challenge for communications is the much-hailed revamping of the central bank’s strategy in August and September 2020.

Chair Powell, Governor Brainard and colleagues agreed then it would “be appropriate” to keep borrowing costs ultra-low until maximum employment was reached, which they redefined as a “broad-based and inclusive goal.”

One problem: The Fed’s policy framework doesn’t address how officials should balance risks between inflation and employment, an omission drawing criticism from economists such as Harvard University’s Jason Furman, who led former President Barack Obama’s Council of Economic Advisers.
Powell or Brainard Will Struggle


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