(Finance) – “Monetary policy cannot address the specific reasons why low-income households are most affected by high inflation. But these reasons help illustrate the importance of low inflation: low inflation is the key to achieving a long and sustained expansion, an economy that works for everyone“. He stated this Philip Jeffersona member of the Federal Reserve Board of Governors, during an event on opportunity and inclusive growth at the Minneapolis FED.
Jefferson did not comment directly on the US central bank’s aggressive interest rate hikes, but he did specify that “pursuing our dual mandate is the best way for the Federal Reserve to promote a widely shared prosperity“.
“At the same time, it is crucial that monetary policy makers understand the many and varied conditions that can make our policies more effective in promoting prosperity,” he added.
In his speech he recalled that “research has shown that the advantages of a strong economy, with high employment and stable prices, are particularly significant for less advantaged groups. These groups also tend to see the biggest gainers later in an expansion, meaning they benefit most from extended periods of growthlike the expansion we were experiencing before the pandemic, which was the longest on record.”