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Fed to stop using unemployment as guide

  • The Federal Reserve announced that it's going to start looking for other economic metrics instead of only relying on the employment rate in order to determine economic health. 

    "A highly accommodative stance of monetary policy remains appropriate," the committee said. The central bank has expectedly reduced the size of its monthly bond purchases to $55B. 

    Apart from dropping the unemployment rate threshold, the committee also updated the projections of inflation, economic growth and unemployment. Reports suggest that it expects the growth to be a little slower with a steep decline in the rate of unemployment. 

    "They believe that the unemployment number isn't adequately capturing the true conditions in the labor market," an economist and former Fed official said. However, "there isn't another number that does it either as an alternative."

     

    Tagged as: federal reserve, fed reserve, unemployment rate federal reserve, money news, business news