Narayana Kocherlakota, Columnist

Yes, the Fed Should Target Racial Equality

Biden’s third mandate would benefit all Americans.

July 22, 2020 at 10:30 AM UTC

Narayana Kocherlakota is a Bloomberg Opinion columnist. He is a professor of economics at the University of Rochester and was president of the Federal Reserve Bank of Minneapolis from 2009 to 2015.

It does.
Photographer: Scott Olson/Getty Images

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Presidential candidate Joe Biden has caused a stir with an ambitious economic proposal: making racial equity part of the U.S. Federal Reserve’s mandate. Critics worry that such an explicitly political goal will compromise the central bank’s independence, and undermine its efforts to do what is best for the economy as a whole.

Actually, I think it’s a great idea. If Congress insists that the Fed act to reduce racial inequality in labor markets, it won’t benefit only Black Americans. It will achieve better economic outcomes for the country as a whole.