Economics
Powell’s Fed Debut Shows Shift Away From Theory, Models
- Fed forecasts show mild response to labor market overshoot
- Powell willing to let labor market show him when slack is gone
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Federal Reserve Chairman Jerome Powell showed he will be guided by the U.S. economy’s performance rather than the theories and models relied upon by his predecessors to set monetary policy for the past three decades.
Fresh from overseeing his first policy-setting meeting and its first interest rate hike of 2018, Powell signaled he won’t try to guess the limits of the labor market or the growth-boosting effects of Republican tax cuts.