Tag Archives: Federal Reserve

Can The Federal Reserve Chair Take On Wall Street?

By Danish Khan

YellenStiglitz

The recent speech by the new Chair of the Federal Reserve, Janet Yellen, was remarkable in multiple ways. First of all, Ms. Yellen acknowledged that working people are still suffering from the recent economic crisis and the recovery is at best incomplete. She also gave a precise number of the unemployment rate that can be sustained while maintaining a stable inflation rate, and in her estimates that number is around 5.2 percent to 5.6 percent. This number is simply too high, it should not be more than 4.0 percent. In simple terms, by accepting 5.2 percent to 5.6 percent, she is saying that if the number of unemployed people gets down to 8 million people out of the 155 million who are in the labor force, then the Federal Reserve will have achieved its ultimate target. I think the Madame Chair should be reminded that the primary task assigned to the Federal Reserve, as far back as the 1940’s, is to achieve full employment. Read more