Why everybody's talking about the Fed's "third mandate"
Summary
The article discusses Stephen Miran's testimony at a Senate hearing, where he emphasized a less mentioned part of the Federal Reserve's goals, focusing on keeping long-term interest rates moderate. This focus is different from the usual attention given to stable prices and maximum employment, which could affect how the Fed manages its policies.Key Facts
- Stephen Miran testified before the Senate Banking Committee about the Federal Reserve's goals.
- He highlighted a third goal in the Fed's mandate: moderate long-term interest rates.
- Traditionally, the Fed focuses on stable prices and maximum employment.
- Long-term rates are important because they influence things like mortgage and corporate rates.
- The Fed directly controls short-term interest rates, but its actions can influence long-term rates.
- The Fed's balance sheet and regulatory decisions can impact long-term interest rates.
- Michael Brown discussed the potential for the Fed to adopt more active policies for managing long-term rates.
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