Why “Full” Employment is an Empty Promise

By Karen Shaw Petrou

In her speech on September 26, FRB Gov. Brainard deploys a lot of data to raise, but then duck, what I think is the most critical question about post-crisis monetary policy:  Is U.S. employment really “full” enough to justify wider wealth inequality that is in part the Fed’s fault?  Chair Yellen and others defend quantitative easing (QE) and ultra-low rates on grounds that U.S. “full” employment will eventually be matched by growth, consumption, and resilient, robust recovery.
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What $4.5 Trillion Can Do – But Not for You

By Karen Shaw Petrou

Following the Federal Open Market Committee (FOMC) meeting of September 19-20, Chair Yellen admitted that she really didn’t understand if the Fed’s $4.5 trillion portfolio had any role in the slow-go U.S. recovery.  Many have since remarked on the startling fact that the Fed to this day is not sure if quantitative easing (QE) works and, if it does, how.  And, despite all this uncertainty, the Fed appears bent on keeping at least a few trillion in its hands just in case – presumably even if it didn’t work this time around, maybe it will the next time the U.S. economy needs a bit of a boost, or so the Fed seems to think.
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