The Federal Reserve’s Semi-Annual Monetary Policy Report Wednesday, March 8, 2023 10:00 AM in 2128 RHOB. Ntsetselelo Dlamini, Intern, Skidmore College
Last week, I attended a House Financial Services Committee hearing during which Mr. Jerome Powell, chair of the Board of Governors of the Federal Reserve System, testified on the Federal Reserve's Semi-Annual Monetary Policy Report.
As an international student, I appreciate the level of transparency and accountability that is an essential building block of any democracy. Seeing the Chairman answer a wide range of questions from different Congressmembers representing constituents from around the country served as a subtle reminder that ‘everybody has a boss.’
Now, as a student of Economics, I came to the hearing curious to see how the Federal Reserve seeks to maintain the delicate balance of achieving its two objectives of maximum employment and price stability. It is my belief that it is not a secret that contractionary monetary policy is an effective tool to curb inflation. I also think that rising prices disproportionately affect low income and disadvantaged citizens who do not have much disposable income to begin with. (Ed note: Creative Investment Research sometimes disagrees with this conclusion.)
The combination of record low unemployment and high inflation is certainly not familiar ground but the Federal Reserve seems committed to achieving 2% inflation, even at the potential cost of jobs.