“In 1977, when I started my first job at the Federal Reserve Board as a staff economist in the Division of
International Finance, it was an article of faith in central banking that secrecy about monetary policy decisions was
the best policy. Central banks, as a rule, did not discuss these decisions, let alone their future policy intentions.”
– Janet Yellen
The Through Line: The Fed’s next interest rate decision has been hotly debated among finance types for weeks. Unlike other central
banks whose only objective is controlling inflation, the U.S. Federal Reserve has been congressionally mandated to focus on both price
stability and full employment, a.k.a. the dual mandate. The problem: these two objectives may require contradictory policy responses.
Messy and missing data (courtesy of the record-breaking government shut down) heighten the tension. We outline the issues and our
prognosis for the period ahead.
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