Jobs
Fed Wanted an Inclusive Jobs Recovery. Some Are Asking If That Helped Fuel Inflation
- US central bank is conducting first strategy review since 2020
- Some say goal for inclusive recovery slowed inflation response
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In the first formal review of their policy strategy in five years, Federal Reserve officials are confronting a question that many outside the building have already taken up: Did their ambitious goals for a more inclusive job-market recovery after the pandemic slow their response to surging inflation?
For a lot of economists, the answer is clearly yes. To them, the last overhaul of the US central bank’s policymaking framework in 2020 reflected a shift in priorities toward maximizing employment at the expense of minimizing inflation. Others — including Fed Chair Jerome Powell — argue such assertions are based on a misunderstanding of the strategy.