In a major victory for the Fed Up campaign, the Federal Reserve announced on January 16 that it is establishing an advisory council “with a particular focus on the concerns of low- and moderate-income populations.” The announcement comes five months after CPD and our partners led a protest at the Fed’s annual policy conference at Jackson Hole, Wyoming and two months after our Fed Up coalition met with Fed Chair Janet Yellen and three other Fed Governors, both of which were widely covered in the press.

At our November meeting, leaders like Philadelphia’s Kendra Brooks, St. Louis’ Reginald Rounds, and Wichita’s Rev. David Carter told Chair Yellen about the struggles for people who are unemployed and underemployed in their cities. The Fed’s new advisory council will formalize the opportunity for leaders to relay such perspective to Fed policy makers on a regular basis, which is critical because the Fed usually hears only from business and banking executives.

The Fed is currently in the midst of an intense debate about whether to reduce its support of the economy by raising interest rates. Although the headline unemployment number has dropped significantly, wages remain stagnant and millions of workers are underemployed or have left the workforce entirely because of dim job prospects. That’s why CPD and our Fed Up allies are urging the Fed to maintain its low interest rate policies for the foreseeable future, so that the labor market can tighten significantly and workers can start to see meaningful improvements in their wages.

Although this new advisory council is a good first step, the Fed still needs to do a lot more. A priority should be to reform the currently opaque and insular process that is being conducted by the regional Federal Reserves in Philadelphia and Dallas to select their next bank presidents.  

It is imperative that genuine community representatives be appointed to the Class B and Class C seats on the Fed’s 12 regional bank boards of directors – i.e., to the decision-making positions – as well as to the advisory positions on the new Council and its regional equivalents.