When Monetary Policy Is Asked to Do Too Much | Metals Mine

  • When Monetary Policy Is Asked to Do Too Much

    From wharton.upenn.edu

    The Federal Reserve has two clear mandates from Congress: maintaining price stability and achieving the highest possible level of employment. The Fed uses its interest rate tools, balance sheet management, and public statements to address major economic disruptions, such as the pandemic and the most severe inflation increase since 1980. Those tools matter. They can cool excess demand and support the economy during downturns. But these tools cannot replace sound fiscal policy, nor can they repair long-standing structural weaknesses in the economy. This point has been underscored by the growing body of research on ... (full story)

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