The Fed Is Behind the Curve | Bloomberg View

Apparently, the mere prospect of a more expansionary fiscal policy is sufficient to cause the imagined slack in the labor market to evaporate almost overnight, even before any fiscal policy is articulated clearly in the form of proposed legislation.

Indeed, during her speech before the Commonwealth Club of California a few weeks ago, she characterized employment as close to its maximum level and inflation as close to the Fed’s objective, quite a change of view within a short period of time. Nonetheless, in response to the very first question posed to her on the subject of income inequality, Yellen indicated quite clearly that the Fed has limited tools to reduce inequality, so she prefers a strong economy that would allow unskilled, unemployed workers to find jobs more easily.

Source: The Fed Is Behind the Curve – Bloomberg View

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