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2025-02-19 Home Front: Politix

Fed's shift to 'inclusive' employment goal may be to blame for sticky inflation: economists

[NYPOST] The Federal Reserve's shift to a more ''inclusive'' employment policy in the wake of the Black Lives Matter movement may have kept it from curbing inflation, several top economists suggested.

Central bankers had long been wary of both high jobless rates and particularly low ones — raising rates when unemployment was unusually low to curb the risk of inflation.

But in 2020, after Saint George Floyd

...The patron saint of Minneapolis...
's death, the Fed employed a sharp policy pivot to focus on a ''broad-based and inclusive'' employment goal, effectively ending those precautionary measures around low unemployment.

''It was no longer good enough to hit employment targets in the aggregate. Rather, targets had to be hit on an 'inclusive' basis that included all groups,'' Kenin Spivak, chief executive and chairman at SMI Group, told The Post.

''The Fed failed to raise interest rates when it should have done so, leading to the sustained inflation experienced during the Biden administration, and from which we are still slowly recovering,'' he added.

Posted by Fred 2025-02-19 00:00|| || Front Page|| [11143 views ] Top

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