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IPFS News Link • Federal Reserve

Reaction to the Federal Reserve Policy Statement

• http://www.lewrockwell.com, By Peter Schiff
 Her success on that front has been made possible by Wall Street cheerleaders and a largely docile media.

The main problem that the Fed has been facing over the past few months is that the official unemployment rate has been drifting downward towards 6.5%, the level at which it had previously determined would trigger a shift toward monetary tightening. But the rate has been falling not because people are getting jobs, but because people have stopped looking for them. Due to the shrinkage of the labor participation rate, which is the main driver in the falling unemployment numbers, the economy has not received the type of positive momentum that would normally accompany a drift downward in unemployment. As a result, the Fed has to back away from its prior guidance.

 


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