US economy unable to reach potential with inequities: Fed chair

Fed officials attentive to disparities in labor market, rather than just headline numbers, Powell says

Ovunc Kutlu   | 09.11.2021
US economy unable to reach potential with inequities: Fed chair FILE PHOTO


US economy would be unable to reach its potential if inequities prevent some Americans from full participation in the labor market, Federal Reserve Chair Jerome Powell said Tuesday.

The coronavirus pandemic-led recession had adversely affected workers who were finally beginning to experience the benefits of a period of historically long economic growth, but they had to "disproportionately shoulder the brunt of the pandemic's burden," he said at the Conference on Diversity and Inclusion in Economics, Finance, and Central Banking.

Although most inequities are beyond the power of the Fed's monetary policy, Powell said one of its mandates, given by the US Congress, is to achieve maximum employment in the labor market for a strong and stable economy.

Powell said the Fed looks at a wide range of indicators when it assesses maximum employment, adding the central bank officials are attentive to disparities in the labor market, rather than just headline numbers.

"Diversity and inclusion play a role in policymaking as well. As policymakers working on behalf of the entire public, we benefit greatly by seeking out and listening to the perspectives and experiences of people who represent the diverse landscape of the economy," he noted.

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