, Columnist
Hidden Biases Determine How the Fed Sets Interest Rates
Leadership changes at the central bank will be an opportunity to rethink the way inflation is targeted.
Housing is part of the equation.
Photographer: David Paul MorrisThis article is for subscribers only.
The basic mandate of the Federal Reserve is to promote broad economic conditions to achieve maximum employment and price stability. Since its mission focuses solely on macroeconomic conditions, monetary policy is considered to be unbiased.
Yet, can monetary policy be unbiased from its mandated objectives, but biased in the way it attempts to achieve them? While the mandate of the Fed has been straightforward and constant, the operating framework in which officials try to meet their objectives has indeed changed.