The Fed’s Own Forecasts Show That It Needs to Loosen Up

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Will the Fed finally decide to loosen up a bit and do something to prop up our fragile economy? Maybe! Brad Plumer points us to this chart compiled by the Council on Foreign Relations that explains why they might. Back in March, the Fed thought unemployment was falling nicely and would reach 6.5% by the end of next year. By May they were far more pessimistic, predicting that unemployment would be only barely below 8% by then. And, as Brad says, that’s not all:

Of course, there’s more than the unemployment rate to consider. Jobless claims have been ticking upward of late. Retail and manufacturing is weakening. The housing market is still flailing along. Plus, Fed officials will have to consider whether Europe still poses a threat to the U.S. recovery. But the [CFR] graph lays the choice out starkly. If the rough patch in May wasn’t just a blip, then the Fed will be failing to achieve its own stated goals for unemployment.

It’s past time for the Fed to do something about this, and it’s not just Paul Krugman saying so. The Fed’s own forecasts are saying it too.

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DEMOCRACY DOES NOT EXIST...

without free and fair elections, a vigorous free press, and engaged citizens to reclaim power from those who abuse it.

In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily crazy—Mother Jones' journalism is driven by one simple question: Will America will move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

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