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Challenges for Monetary Policy
Article

Challenges for Monetary Policy


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The US economy pushed past its 10th anniversary of expansion in July 2019. But while unemployment remains low and inflation in check, GDP growth is slowing from its vigorous 2018 pace. Add to that an escalating trade war, tepid global growth and president Donald Trump’s persistent hammering of the central bank, and the Federal Reserve has its hands full. Business leaders can gauge Fed chair Jerome H. Powell’s thinking about future monetary policy in his remarks delivered at the annual Jackson Hole Economic Symposium in August 2019.

Take-Aways

  • Low inflation and jobless rates signal that the Federal Reserve is achieving its dual mandate of stable prices and “maximum employment.”
  • Central bankers can look to US monetary policy history as a guide to navigating the current economic landscape.
  • Low interest rates and the tariff war are among the challenges the Fed faces as it strives to extend the US expansion.

About the Author

Jerome H. Powell is the chair of the board of governors of the Federal Reserve.