Economics
The Fed Takes a Second Look at Its Good-News Story on American Jobs
- Vice chairman Clarida spotlights drop in labor share of income
- It shows policy review could widen beyond inflation shortfalls
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It began as an inquest into what went wrong. Now the Federal Reserve’s policy rethink may be widening to include the part the central bank thought it had gotten right.
Inflation keeps falling short of the Fed’s target, and that was the trigger for what’s supposed to be a months-long review of strategy. Now, policy makers are being drawn into a conversation about the full-employment side of their mandate too.