Fed Continues to Twiddle Its Thumbs

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Here is the latest statement from the Fed:

The Committee expects economic growth to remain moderate over coming quarters and then to pick up very gradually. Consequently, the Committee anticipates that the unemployment rate will decline only slowly toward levels that it judges to be consistent with its dual mandate. Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee anticipates that inflation over the medium term will run at or below the rate that it judges most consistent with its dual mandate.

So there you have it. Unemployment remains higher than the Fed’s target and inflation remains at or below its target. The obvious response is to target unemployment more strongly since inflation is likely to remain subdued. Instead, the Fed announced it would do nothing new.

That sound you hear is millions of people who actually care about unemployment banging their heads against the wall in frustration. Easier monetary policy might or might not be effective, but it seems like even the Fed thinks it would be a pretty low risk thing to try. So why not try it?

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Mother Jones was founded to do journalism differently. We stand for justice and democracy. We reject false equivalence. We go after stories others don’t. We’re a nonprofit newsroom, because the kind of truth-telling investigations we do doesn’t happen under corporate ownership.

And the essential ingredient that makes all this possible? Readers like you.

It’s reader support that enables Mother Jones to devote the time and resources to report the facts that are too difficult, expensive, or inconvenient for other news outlets to uncover. Please help with a donation today if you can—even a few bucks will make a real difference. A monthly gift would be incredible.

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