Economics
Here’s What a Biden Victory Means for the Federal Reserve
- Central bank will stick with historically low interest rates
- Leadership, regulatory posture may change under the Democrat
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A victory for Joe Biden in the U.S. presidential election may eventually reshape the Federal Reserve’s leadership and the way it regulates big banks, but it won’t change what matters most for financial markets and the economy: monetary policy.
With the economy struggling to regain its pre-pandemic strength, Fed officials have telegraphed clearly that interest rates will stay near zero for at least three more years. Moreover, in August the Fed’s rate-setting panel unanimously endorsed a new long-run strategy that promises to keep rates lower coming out of this recession than officials had dared during previous recoveries.