Fed Shifts Focus to Labor Side of Dual Mandate 

In a speech on October 14, Federal Reserve Chair Jerome Powell stated that employment and inflation expectations have not differed from September’s evaluations. While recent expectations have caused the Fed to increase its preferred inflation level to 2.9 percent, the Federal Reserve will likely begin to shift more of its focus towards addressing increasing pressures from unemployment. The Fed is expected to lower rates two more times this year. During his speech, Chair Powell defended the Fed’s Covid-era actions of buying mortgage-backed securities and long-term treasury bonds and how stopping the purchases sooner would not have softened the economic downturn from Covid.

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