Monetary policy and the Federal Reserve

Fed policy is a critical component of a broad policy agenda to sustain economic growth, create more jobs, and raise stagnating wages. By keeping the target for its benchmark interest at zero since 2008, the central bank has helped the nation recover from the darkest days of the Great Recession. But despite improvement in the job market, unemployment is still unacceptably high for many workers, including blacks and Hispanics. By keeping interest rates where they are at its meeting next month, the Fed would support a still-struggling economy and provide a better foundation for tackling income inequality and wage stagnation. Widespread wage growth will not occur over the coming years if the Federal Reserve prematurely slows the recovery in the name of fighting prospective inflation. Inflation is not a threat. Recent EPI research shows why.