Randolph Kinney
Elite Member
- Joined
- Apr 7, 2005
- Professional Status
- Retired Appraiser
- State
- North Carolina
Fed Responds to a Grim Reality
http://www.nytimes.com/2012/09/15/b...915&adxnnlx=1347714084-dbcZT7UHXyZVao2eTLmYxg
The very word “employment” did not appear in a policy statement until 2008. The Fed was focused on inflation, officials said time and again.
That era is over. The signs have been there for some time, but they are now unmistakable. Ben S. Bernanke, the Fed’s chairman, made clear on Thursday that job creation is its primary concern for the foreseeable future.
The remarkable transformation of the Fed’s priorities is partly a response to the grim reality that more than 20 million Americans cannot find full-time jobs. It is made easier by the fact that the Fed has been so successful in stabilizing inflation right around the 2 percent annual pace that officials consider most healthy.
But as circumstances have changed, so has the Fed itself. Under the leadership of Mr. Bernanke — with considerable prodding and support from a board almost entirely appointed by President Obama — the central bank has gradually concluded that it has a responsibility to act more forcefully, and, equally important, that it has the ability to spur job creation directly.
Some argue that the Fed’s efforts to spur job growth by decreasing long-term borrowing costs will inevitably result in higher inflation, eventually reducing growth and employment.
Mr. Bernanke’s predecessor, Alan Greenspan, once told his board that he did not want to mention job creation as a policy objective because the Fed would be making a promise that it lacked the power to keep.
http://www.nytimes.com/2012/09/15/b...915&adxnnlx=1347714084-dbcZT7UHXyZVao2eTLmYxg
The very word “employment” did not appear in a policy statement until 2008. The Fed was focused on inflation, officials said time and again.
That era is over. The signs have been there for some time, but they are now unmistakable. Ben S. Bernanke, the Fed’s chairman, made clear on Thursday that job creation is its primary concern for the foreseeable future.
The remarkable transformation of the Fed’s priorities is partly a response to the grim reality that more than 20 million Americans cannot find full-time jobs. It is made easier by the fact that the Fed has been so successful in stabilizing inflation right around the 2 percent annual pace that officials consider most healthy.
But as circumstances have changed, so has the Fed itself. Under the leadership of Mr. Bernanke — with considerable prodding and support from a board almost entirely appointed by President Obama — the central bank has gradually concluded that it has a responsibility to act more forcefully, and, equally important, that it has the ability to spur job creation directly.
Some argue that the Fed’s efforts to spur job growth by decreasing long-term borrowing costs will inevitably result in higher inflation, eventually reducing growth and employment.
Mr. Bernanke’s predecessor, Alan Greenspan, once told his board that he did not want to mention job creation as a policy objective because the Fed would be making a promise that it lacked the power to keep.
