Analyst: The Federal Reserve should adjust its dual mandate target and readjust its monetary policy

By: theblockbeats.news|2025/08/05 14:02:14
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BlockBeats News, August 5th, Wellington Management's Fixed Income Portfolio Manager Brij Khurana stated that the Federal Reserve plans to update its statement every 5 years, outlining how it will achieve its dual mandate of maximizing employment and maintaining price stability. The Federal Reserve last issued this statement during the 2020 COVID-19 pandemic, adopting a framework that focused on a 2% long-term average inflation rate.

Later this year, when the Federal Reserve releases its next statement, it should thoroughly reconsider its dual mandate and readjust its monetary policy to move towards maximizing productivity. Since 2008, the annual growth rate of US productivity has slowed to 1.6%, down from 2.4% over the previous 18 years. Placing emphasis on reaccelerating productivity will enable the Federal Reserve to achieve its dual mandate goals without unintended negative consequences, including exacerbated income inequality and rising debt levels—both of which dampen productivity. This trajectory of development necessitates a revision of the dual mandate. (Financial Times)

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