Fed Draws on Academia, Goldman for Recent Appointees
Fed Draws on Academia, Goldman for Recent Appointees
When the Federal Reserve was established, Congress called for its policy makers to have “fair representation of the...
When the Federal Reserve was established, Congress called for its policy makers to have “fair representation of the financial, agricultural, industrial, and commercial interests, and geographical divisions of the country.”
But Fed officials have recently been drawn from just two backgrounds—academics, either at universities or Fed research departments, and alumni of the financial services firmGoldman Sachs & Co.
The announcement Tuesday that Neel Kashkari would become president of the Federal Reserve Bank of Minneapolis marked the third Goldman Sachs alumnus in a row to be picked to become a Fed bank president. The other two—Dallas’s Robert Steven Kaplan andPhiladelphia’s Patrick Harker —took office earlier this year.
Mr. Kashkari is a former investment banker at Goldman Sachs and a former Treasury official who ran the government’s Troubled Asset Relief Program (TARP) during the financial crisis. He takes the helm of the Minneapolis Fed Jan. 1, 2016.
Of the 17 Fed officials in office next year—five members of the Board of Governors and 12 regional bank presidents—all but three will have professional backgrounds as academics or with Goldman Sachs. The exceptions will be Atlanta Fed President Dennis Lockhartand Fed governor Jerome Powell, who worked at other banking institutions, and Kansas City Fed President Esther George, who was primarily a bank supervisor.
“The obvious downside of this is there’s more of a groupthink within the Fed,” said George Selgin, the director of the Center for Monetary and Financial Alternatives at the Cato Institute, a libertarian-leaning think tank, referring to the shift toward a narrow range of backgrounds at the central bank. “That can be very dangerous if the groupthink is based on ways of thinking about the economy that are not necessarily sound.”
Mr. Kaplan, a former Harvard Business School professor, had worked as a vice chairman of Goldman Sachs Group Inc., leading investment banking activities. Mr. Harker, the former president of the University of Delaware, served as a trustee of Goldman Sachs Trust and its Variable Insurance Trust.
New York Fed President William Dudley also spent most of his career at Goldman, ultimately serving as its chief economist.
Since the central bank’s founding a century ago, the background of Fed officials has undergone a dramatic shift.
In the early days after the Fed began in 1913, the people selected to run the nation’s central bank were primarily small bankers, reflecting that in the early days, the Fed’s key function was providing banking services to a highly fragmented banking industry. The notion of using Fed policies to steer the broader economy had not yet taken hold.
Through the Fed’s first 40 years, the backgrounds of officials grew increasingly diverse. In the late 1940s, for example, Fed officials included Chester Davis, a former agriculture commissioner and grain marketer; Laurence Whittemore, of the Boston and Maine Railroad and H. Gavin Leedy, a private practice attorney.
The central bank’s leadership also contained many functionaries who rose through the ranks as Fed administrators, such as Robert Gilbert, who in his 20s become one of the first 14 employees of the Dallas Fed. He worked as a loan and discount clerk and in the war loan department, before becoming manger of the Dallas Fed’s El Paso branch and eventually the Dallas Fed President.
Such quaint backgrounds were common among officials in the central bank’s early days but were beginning to dwindle by the 1960s. Today Fed officials who rose through the ranks are almost entirely Ph.D. economists who headed the regional banks’ research departments; the lone exception is Ms. George, who worked as a bank supervisor and Kansas City Fed administrator. Ms. George holds an M.B.A.
Gradually backgrounds in industry, law, and other aspects of government or administration fell out of favor.
“Keep in mind, for much of the Fed’s first half, the focus was really on financial stability,” said Sarah Binder, a George Washington University professor who is also a senior fellow at the Brookings Institution, a Washington think tank. “There wasn’t a well-worked out body of knowledge about monetary policy.”
As it became apparent that Fed policy held vast sway over the economic fortunes of the country, presidents and regional Fed boards increasingly turned to Ph.D. economists to guide the central bank and to be effective participants during the debates of the policy-making Federal Open Market Committee.
Ms. Binder thinks the narrow range of backgrounds among Fed officials may lead to a central bank that is thin on expertise when it comes to “the responsibilities that are laid on top of the board, in particular, that extend beyond monetary policy.”
The central bank is tasked, for example, with regulating much of the financial system, not only the giant Wall Street banks, but also community banks, insurers and other financial institutions. The Fed retains some responsibilities for consumer protection and community development, is responsible for the nation’s payment systems and continues to operate the discount window and other low-profile back-office banking functions.
Liberal activist groups, led by the Center for Popular Democracy, have pushed for diversity in the appointment of new Fed officials, pressing for representatives of workers and consumers or labor and community leaders. They have had no luck, and with the filling of the Minneapolis Fed presidency and inaction in Congress over two current nominees to the Fed board, there are no looming vacancies for the central bank’s composition to begin a shift.
Source: The Wall Street Journal
Jeb and Hillary’s opportunity on workweek fairness
Jeb Bush and Hillary Clinton have been trading barbs about whether Americans are working hard enough, but behind the...
Jeb Bush and Hillary Clinton have been trading barbs about whether Americans are working hard enough, but behind the give-and-take is a real emerging issue that has a dire impact on our country’s 75 million hourly workers and their families: the 40 hour workweek is no longer something we can count on. The candidates have a chance to move beyond the gamesmanship and support concrete solutions at the national and local level to show their commitment to the stability of working families.
To summarize the exchange, Bush said that “people need to work longer hours.” Clinton quickly responded on Twitter, “Anyone who believes Americans aren't working hard enough hasn't met enough American workers.” Bush retorted, referencing the number of people who are involuntarily working part time and seeking full time work that, “Anyone who discounts 6.5 million people stuck in part-time work and seeking full-time jobs hasn’t listened to working Americans.”
Taken at their word, neither of them is wrong; both sides of the argument resonate in the lived experiences of the millions of people working by the hour. For hourly workers trying to work enough hours to earn enough to get by, it can mean taking the hours they can get –sometimes working short four-hour shifts, putting their lives on hold for a last-minute on-call shift, or working the late night shifts followed by too little sleep because of an early morning shift the next day – also known as a “clopen.”
This is reality for millions of Americans all across the country. Strained, exhausted, and without seeing their families some days. Their rent and bills are predictable, but the work hours they need to pay them are not.
Many of these workers both want more hours, like Bush says, and are working hard, like Clinton says. The American workforce is rapidly changing, and millions of people are caught in a cycle of too few hours, too little control of when their hours occur, and not getting paid for the time they make available to their employers. For part-timed hourly workers, there’s often no way to get ahead.
The issue missing from Jeb and Hillary’s exchange is how underemployment and unpredictability go hand in hand. The one thing these workers can count on is that their schedules will change each week, sometimes with just minutes’ notice. This last minute notice is typical of part-time hourly workers across the economy, especially in fast food and retail, by employers like Target, Starbucks, the Gap, Victoria’s Secret, and others. It’s impossible to pick up more hours at another job if you don’t know day to day what your schedule will be.
If Jeb Bush and Hillary Clinton are looking for real solutions to these issues, a new movement being led by working moms has some concrete policy solutions to offer. Last week, Congress introduced the Schedules That Work Act, a path-breaking bill addressing these underlying problems of part-time work that Bush and Clinton are debating. The bill is a result of workers calling for schedules they can predict, more stable hours they can count on, and the right to have a say into the hours they work without retaliation. The Schedules That Work Act has garnered a wave of support, in both the House and Senate, and comes after a year when legislators in 12 states introduced policies to guarantee a fair workweek, including active municipal campaigns that includes Minneapolis, Albuquerque, and Washington DC.
Clinton launched her campaign and declared, “I believe you should receive your work schedule with enough notice to arrange childcare or take college courses to get ahead” and Bush’s recent statements on involuntary part-time work show that even the GOP can’t ignore the under-employed. But the chaos that under-employment and unpredictable scheduling sows into workers lives is not just fuel for rhetoric, it’s real. And it requires real policy solutions. Hillary and Jeb have the chance to go deeper than their back and forth, address the common underlying problems they’ve both identified, and stand in favor of federal and local legislation that builds a fair workweek.
Gleason is the director of the Fair Workweek Initiative at the Center for Popular Democracy
Source: The Hill
Here's Why The Movement For Black Lives' Demands Came At The Perfect Time
Here's Why The Movement For Black Lives' Demands Came At The Perfect Time
Last week, the DNC took over Philadelphia, television sets, and social media platforms around the country. Viewers...
Last week, the DNC took over Philadelphia, television sets, and social media platforms around the country. Viewers tweeted quotes and zingers from prominent elected officials, and celebrity actors alike. For the most part, it was a vibrant convention with many celebratory acknowledgements for Hillary Clinton becoming the first woman major-party presidential nominee. But here's why The Movement For Black Lives demands, released on Monday, actually came at the perfect time. There's still a long road ahead for full equality, and every political party should continue to be challenged – even during the "glass ceiling"-shattering historic moments.
Many supporters of Vermont Sen. Bernie Sanders and Green Party candidate Jill Stein (or those simply anti-establishment) exercised their right to protest at the DNC, but even still, the underlying message last week was clear: Unite to stop Donald Trump. The Republican presidential nominee poses a real threat to already-marginalized communities in America should he be elected President – but he's not the only threat. For black lives particularly, police violence, and economic freedom are some of the lingering systemic issues that have long oppressed black communities. And it's a deep-rooted problem that continues to need attention – especially as candidates in the general election are eagerly vying for the trust of American citizens from now until November.
The Movement For Black Lives is a collective of more than 50 organizations that represent Black people across the United States, including Black Lives Matter. The collective released a comprehensive platform of demands that aim to combat the systemic marginalization of black communities:
“Black humanity and dignity requires Black political will and power. Despite constant exploitation and perpetual oppression, Black people have bravely and brilliantly been the driving force pushing the U.S. towards the ideals it articulates but has never achieved. In recent years we have taken to the streets, launched massive campaigns, and impacted elections, but our elected leaders have failed to address the legitimate demands of our Movement. We can no longer wait.”
The process to create the demands took one year – beginning last year when 2,000 people gathered in Cleveland to discuss ideas for the movement, the site read. In a breakdown of one the platform demands for political power, the collective called for an end to super PACs, and "unchecked corporate donations" that influence political elections, along with ensuring voting rights, and an increase in funding for HBCUs.
What's especially interesting about the platform, is that some of the demands, like, reparations, are often viewed unfavorably and do not make the conversation in major-party platform settings like the DNC. But some polls suggest that significant percentages of black Americans support reparations – therefore making it an important conversation, at the very least, for all political candidates.
In an interview with The New York Times, Marbre Stahly-Butts, a leader in the Movement for Black Lives Policy Table, explained why the demands "go beyond individual candidates."
"On both sides of aisle, the candidates have really failed to address the demands and the concerns of our people," she said.
And as police violence continues to disproportionately affect Black lives, among other systemic issues, it continues to be important to push for justice, during and after the general election.
By KIMBERLEY RICHARDS
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The First Time Maria Gallagher Talked About Her Sexual Assault, It Was to Senator Flake
The First Time Maria Gallagher Talked About Her Sexual Assault, It Was to Senator Flake
The Senate Judiciary Committee has officially voted to move Brett Kavanaugh's Supreme Court nomination forward. However...
The Senate Judiciary Committee has officially voted to move Brett Kavanaugh's Supreme Court nomination forward. However, Sen. Jeff Flake has requested an FBI investigation take place before the full Senate votes on Kavanaugh's confirmation, something Republican leaders have now agreed to, per The Hill.
Read the article and watch the video here.
Interest rate clock ticks for Janet Yellen and the Fed – but is China a wild card?
In just a little over three weeks’ time, on 17 September, the US central bankers are going to have to sit down around a...
In just a little over three weeks’ time, on 17 September, the US central bankers are going to have to sit down around a table and decide whether to raise interest ratesfor the first time since before the financial crisis of 2008 unfolded. And just as the markets were preparing for the news, China has thrown a wrench in the works.
Just to put this in its proper context, the last time the Fed raised interest rates, it was June 2006. Microsoft was releasing a version of Windows Vista; Google officially became a word in the Oxford English Dictionary. The Da Vinci Code ruled at the movie box office. The iPhone hadn’t even been introduced yet; we didn’t yet live in a world of apps and selfies. Hey, you could even collect interest on your bank savings account!
If it all feels blurred and slightly unreal (especially the idea of earning interest from a bank account) in your mind, that’s OK. Time has a habit of doing that to us. Then, too, what has happened since then has rendered the events of 2006 pretty forgettable: the financial crisis, the recession, and the struggle to get back to where we were, all neatly summarized in the glib phrase that some use when describing the first part of the 21st century: the “lost decade”.
But the Fed really, really, really wants to get back to normal. And that would be the old normal – when its team of policymakers meets once every six or seven weeks to monitor the economy and determine whether it’s overheating or cooling down too rapidly. Then they whip out the key tool in their monetary policy arsenal – interest rates – and adjust it accordingly. If the economic environment is too robust and the threat of inflation looms large on the horizon, well then, higher interest rates should make money more costly, dampen demand for it and calm everyone down a bit. On the other extreme, if animal spirits are low and unemployment is high, low interest rates should generate some economic activity and get everything moving again.
For now, the Fed’s leaders have said repeatedly, they are waiting until they are reasonably sure that inflation is heading toward their annual target of 2%. For the last three years, it hasn’t approached that level, and there’s tremendous uncertainty about acting too soon – and causing the economy to stall altogether – or delaying and perhaps allowing bubbles to take shape and jeopardize the credibility of the Fed itself as a policy-making institution.
It doesn’t help that the post-crisis recession seemed to throw the ability of monetary policy as a tool to guide the economy smoothly through storms into question. It certainly wasn’t enough to get the economy going once the financial system had been rescued from bankers intent on dashing off a precipice like lemmings, carrying the whole structure with them.
And now policymakers must continue to grapple with economic news that can be used in whatever way a pundit wants, to advocate for pretty much whatever point of view one wishes. The housing market is recovering at its strongest pace in nearly a decade! But it’s still functioning well below long-term historical averages, when compared to total national GDP levels. It all depends on which data set you prefer to look at. Employment? Well, the good news is that unemployment levels have fallen. On the other hand, there’s absolutely no wage inflation to be found, much less to be contained: most Americans would find the idea to be laughable. Indeed, middle income earners have seen a significant erosion in their buying power. There is inflation, but it’s in the prices of goods and services, not in wages.
Yellen and her fellow policymakers need to wake up and smell the espresso, according to a consortium of progressive policy organizations led by the “Fed Up” campaign, a nonprofit created by the Center for Popular Democracy. They’re putting together an online petition to be delivered to Yellen and other Fed members at their annual Jackson Hole, Wyoming retreat at the end of August. “Working families haven’t made a full economic recovery, and now is not the time to declare victory,” the petition states, noting that higher interest rates would make it more costly for Americans to buy homes or cars, as well as boosting the costs of student loans and credit card or any other form of debt.
All of that is true, but the Fed policymakers aren’t just thinking about working families when they consider boosting interest rates. They’re considering the bigger picture, and specifically what might happen if they don’t act: inflation (in the form of a flood of new, cheap loans from banks) and, far more dangerously, asset bubbles.
The latter is a real risk: the Fed already is stepping up its scrutiny of one particularly risky and active party of the market fueled by ultra-cheap financing, the leveraged loan market. According to at least one source, since the Fed tried to crack down when banks were shrugging off the regulator’s guidelines, the market has only grown still larger, to nearly $875bn. And it is full of the kind of excessive risk taking that led to the 2008 crisis.
In a perfect world, Yellen and the Fed would rather not preside over a repeat of that event, and if the price to pay is higher interest rates, well, that’s a perfectly acceptable tradeoff, thank you very much. Indeed, some economists believe that they already are delinquent; that they should have begun “normalizing” interest rate policy a long time ago. Already, a Bank of America securities report has scoffed that keeping rates unchanged for so long has left the Fed suffering from “central bank policy impotence” – and no little blue pill in sight.
So, will the Fed act?
The minutes of the Fed’s last meeting, held in late July, which were released to the public last week, display a lot more dithering and a considerable amount of wariness. Inflation data just isn’t there; Federal Open Market Committee members say they want more evidence that economic growth is “sufficiently strong”. How Yellen will forge a consensus out of this group is baffling.
And then there is the wild card: China. Is it even possible for the US to consider raising interest rates with the yuan depreciating, stock markets plunging and the contagion spreading to other markets in Southeast Asia? The precise extent to which these events might affect the United States is hard to gauge, but in a globalized economy, of which China and its 1.4 billion citizens play a growing and significant role, the Fed can’t pretend that they are blips on the horizon.
For my part, I’m left with only one certainty. Charged with sorting through all these issues, weighing them, and making the right policy choices for the country, Yellen is earning every penny of her annual salary of $201,700.
Source: The Guardian
Texas Matters: Unemployment Still A Problem For Texas Minority Communities
Texas Public Radio - March 6, 2015, by David Martin Davies - The U.S. Labor Department reports that the latest national...
Texas Public Radio - March 6, 2015, by David Martin Davies - The U.S. Labor Department reports that the latest national unemployment rate is 5-point-5 percent. That’s good news for the economy overall and the sluggish recovery. But if you are still one of those without a job then the unemployment rate is 100%. But for minority communities the recovery has yet to arrive. A coalition of community and labor groups in Texas is calling for the Federal Reserve to focus on full employment and higher wages for blacks, Latinos, native peoples and others in poor neighborhoods who have been left out of the recovery. Connie Razza is the Director of Strategic Research at the Center for Popular Democracy.
Listen to the clip here.
2020 Democrats Band Together To Call For Puerto Rico Debt Cancellation
2020 Democrats Band Together To Call For Puerto Rico Debt Cancellation
Ana Maria Archila, co-executive director of the Center for Popular Democracy, welcomed the legislation. “The vast...
Ana Maria Archila, co-executive director of the Center for Popular Democracy, welcomed the legislation. “The vast majority of Puerto Rican debt is owned by actors who invested knowing full well that Puerto Rico could not pay,” she said. “There’s no way for Puerto Rico to recover if it has to use public money to pay hedge funds.”
Read the full article here.
Community Organizing Can Deliver Jobs and More Jobs
Huffington Post - December 22, 2014, by Ana Garcia-Ashley - It was heartening to see Missouri's Attorney General...
Huffington Post - December 22, 2014, by Ana Garcia-Ashley - It was heartening to see Missouri's Attorney General finally take action by suing at least 13 municipalities due to their excessive court fees last week.
As the ACLU and the NAACP target the Ferguson Florissant school district to get more diverse representation on their school board, which is heavily white, we see progress on that front as well.
Gamaliel affiliate MCU and its allies are working to get County Executive-elect Steve Stenger to hold a county-wide summit of law enforcement officials and local mayors to promote community policing and an end to racial profiling and excessive court fees. So far, Stenger has agreed in principle to the summit, but a date has not been secured.
We believe it is essential to take a long hard look at what works in the long term in communities of color. In our more than 20 years of organizing, we have found that nothing works better than jobs at getting people off the street and putting money into low-income neighborhoods.
We must put in place criminal justice reforms, but we must put equal attention toward creating more and better jobs as a key long term solution. For that, we must continue our advocacy and organizing efforts.
What we found in our new study, "Jobs and More Jobs" was that in 2012 and 2013, among our 43 affiliates and across 16 states, the Gamaliel network won public policy campaign victories worth more than $13 billion, creating more than 450,000 jobs and generating more than a $17 billion increase in the gross domestic product. The victories ranged from transit access to criminal justice and even included food justice wins. The key takeaway of Jobs and More Jobs is this: organizing creates jobs.
Organizing creates the public space in which real people come together around a shared set of values to build powerful coalitions that improve the civil, social and economic conditions of their communities and it develops leaders who effectively wage and sustain long-term campaigns around the issues they face.
All community organizers have a similar impact -- not just Gamaliel. We urge our colleagues to assess their own impact. Center for Popular Democracy, DART, Casa de Maryland and others could post similar results.
In the end, we know what works post-Ferguson - jobs. We also know how to get there -- organizing. As Margaret Mead said; "Never believe that a few caring people can't change the world. For, indeed, that's all who ever have."
The 25 page study, called "Jobs and More Jobs," is available for download.
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Charter School Cheats: New Report On Charter Industry Exposes $100 million In Taxpayer Funds Meant For Children Instead Lost To Fraud, Waste & Abuse
ProgressOhio - May 16, 2014 - A new report released today reveals that fraudulent charter operators in 15 states are...
ProgressOhio - May 16, 2014 - A new report released today reveals that fraudulent charter operators in 15 states are responsible for losing, misusing or wasting over $100 million in taxpayer money.
“Charter School Vulnerabilities to Waste, Fraud And Abuse,” authored by the Center for Popular Democracy and Integrity in Education, echoes a warning from the U.S. Department of Education’s Office of the Inspector General. The report draws upon news reports, criminal complaints and more to detail how, in just 15 of the 42 states that have charter schools, charter operators have used school funds illegally to buy personal luxuries for themselves, support their other businesses, and more.
The report also includes recommendations for policymakers on how they can address the problem of rampant fraud, waste and abuse in the charter school industry. Both organizations recommend pausing charter expansion until these problems are addressed.
“We expected to find a fair amount of fraud when we began this project, but we did not expect to find over $100 million in taxpayer dollars lost. That’s just in 15 states. And that figure fails to capture the real harm to children. Clearly, we should hit the pause button on charter expansion until there is a better oversight system in place to protect our children and our communities,” said Kyle Serrette, the Director of Education Justice at the Center for Popular Democracy.”
“Our school system exists to serve students and enrich communities,” added Sabrina Stevens, Executive Director of Integrity in Education. “School funding is too scarce as it is; we can hardly afford to waste the resources we do have on people who would prioritize exotic vacations over school supplies or food for children. We also can’t continue to rely on the media or isolated whistleblowers to identify these problems. We need to have rules in place that can systematically weed out incompetent or unscrupulous charter operators before they pose a risk to students and taxpayers.”
You can read the report by going to www.integrityineducation.org or www.populardemocracy.org.
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Fed Pressed on Questions of Diversity
The Federal Reserve faces criticism from lawmakers and others over its record on diversity at the same time the central...
The Federal Reserve faces criticism from lawmakers and others over its record on diversity at the same time the central bank is highlighting the economic outlook for minority groups.
Several Democrats on the Senate Banking Committee questioned Fed Chairwoman Janet Yellen on Tuesday about the selection process for regional Fed bank presidents, echoing the concerns of advocacy groups who have said the system should be more open and allow more public input.
The 12 regional bank presidents are appointed by regional boards, subject to approval by the Washington, D.C.-based Fed board of governors. As heads of regional Fed branches, they are expected to keep their fingers on the pulse of their local economies and participate on decisions about interest rates. Just two of the current presidents are women and none are black or Hispanic. The last black president stepped down in 1974.
Sen. Elizabeth Warren (D., Mass.) criticized the selection process, saying Washington officials represented little more than a rubber stamp. Earlier this year, Fed governors signed off on the reappointment of most bank presidents until 2021 “without any public debate or any public discussion,” she said.
“If you’re concerned about this, why didn’t you use either of these opportunities to say enough is enough. Let’s go back and see if we can find qualified regional presidents who also contribute to the overall diversity of the Fed’s leadership?” Ms. Warren asked.
“It just shows me that the selection process for regional Fed presidents is broken,” retorted Ms. Warren, calling on Congress to consider changing the process.
The Center for Popular Democracy, a left-leaning advocacy group, has been pressing the Fed for months to increase the diversity of its leadership, as have many Democrats on Capitol Hill who signed onto a letter from Ms. Warren to Ms. Yellen on the matter last month.
Presumptive Democratic presidential nominee Hillary Clinton has also weighed in. Her campaign released a statement saying the Fed “needs to be more representative of America as a whole.”
In a June 13 response to the lawmakers’ letter, Ms. Yellen acknowledged “there is still work to be done” on diversity within the Fed ranks “and I assure you that workforce diversity remains a priority for the Federal Reserve.”
In her prepared testimony Tuesday, Ms. Yellen stressed the need to ensure that the gains from the economic recovery are widely distributed.
She noted that blacks and Hispanics are still suffering some of the effects of the recession in more pronounced ways than other groups. Black and Hispanic workers still face higher unemployment rates than the workforce as a whole, she said.
“It is troubling that unemployment rates for these minority groups remain higher than for the nation overall, and that the annual income of the median African-American household is still well below the median income of other U.S. households,” Ms. Yellen said.
Diverging economic circumstances between white and black households predate the recession but the gaps widened after the financial crisis and have only barely narrowed in the recovery.
A Fed report released alongside Ms. Yellen’s testimony found that black households, which saw their median incomes fall 16% during the recession, are only 88% of the way back to prerecession levels. White households, by contrast, saw incomes fall only 8% and are already back to 94% of prerecession levels, the report said.
It is rare for the Fed to address the economic conditions for individual demographic groups. The central bank’s congressional mandate requires that it seek to hold down unemployment and keep inflation stable for the country as a whole. In the past, Ms. Yellen has said she was sympathetic to the economic troubles of minority groups but stressed the Fed’s options for addressing them were limited.
Ms. Yellen’s comments Tuesday suggest a rising recognition within the Fed that the racial gaps in the economy are becoming more pronounced and that there is a role for monetary policy to play in shrinking those gaps.
“It’s important for us to be aware of those differences and to focus on them as we think about monetary policy and work that the Federal Reserve does in the area of community development,” she said.
Ms. Yellen is set to address the House Financial Services Committee on Wednesday and could face many of the same questions.
By David Harrison
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