The Federal Reserve is tasked with conducting monetary policy in accordance with a dual mandate of maximum employment and stable prices. The Fed has traditionally used these goals as guidelines to help improve economic stability.
Under pressure to implement diversity, equity, and inclusion (DEI) initiatives, however, the Fed revised its monetary-policy objectives to make its employment target more “inclusive.” Pursuit of this goal was one reason that the Fed maintained an overly expansionary policy, with consequences of which we have only just been reminded.
For years, a number of politicians have been pressuring the Fed to implement DEI policies regarding race and income inequality. President Joe Biden, for example, has encouraged the Fed to “aggressively target persistent racial gaps in jobs, wages, wealth.” Read more…
