Optimism in the Time of COVID; Businesses Seem Much Better Adapted to Remaining Open

Federal Reserve: Optimism in the Time of COVID; Businesses Seem Much Better Adapted to Remaining Open

10. See Board of Governors of the Federal Reserve System (2020), Financial Stability Report (PDF) (Washington: Board of Governors, May). Return to text

11. The FOMC defines inflation at the rate of 2 percent, as measured by the annual change in the price index for PCE, as most consistent over the longer run with the Federal Reserve's statutory mandate. Return to text

12. See Board of Governors of the Federal Reserve System (2020), "Federal Open Market Committee Announces Approval of Updates to Its Statement on Longer-Run Goals and Monetary Policy Strategy," press release, August 27. Return to text

13. Federal Reserve staff analysis on the Fed Listens initiative was presented and discussed at the December 2019 FOMC meeting and is part of the Fed Listens report; see Board of Governors of the Federal Reserve System (2020), Fed Listens: Perspectives from the Public (PDF) (Washington: Board of Governors, June). Return to text

14. Summaries of the Committee's discussions are available in the minutes of the associated meetings, which can be found on the Board's website at https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm. An overview of the System staff's work in support of the review is presented in David Altig, Jeff Fuhrer, Marc P. Giannoni, and Thomas Laubach (2020), "The Federal Reserve's Review of Its Monetary Policy Framework: A Roadmap," FEDS Notes (Washington: Board of Governors of the Federal Reserve System, August 27). Return to text

15. A comprehensive review of both of these points can be found in Chair Powell's 2020 speech at Jackson Hole; see Jerome H. Powell (2020), "New Economic Challenges and the Fed's Monetary Policy Review," speech delivered at "Navigating the Decade Ahead: Implications for Monetary Policy," an economic policy symposium sponsored by the Federal Reserve Bank of Kansas City, held in Jackson Hole, Wyo., August 27. Return to text

16. A similar experience played out in the 1990s, as the Federal Reserve under Chairman Alan Greenspan saw unemployment decline to levels well below then-prevailing views of maximum employment, without a significant increase in inflation or unmooring of inflation expectations. Return to text

17. See Board of Governors of the Federal Reserve System (2020), "Federal Reserve Board Releases Results of Stress Tests for 2020 and Additional Sensitivity Analyses Conducted in Light of the Coronavirus Event," press release, June 25. Return to text

18. See Board of Governors of the Federal Reserve System (2020), "Federal Reserve Board Releases Hypothetical Scenarios for Second Round of Bank Stress Tests," press release, September 17. Return to text

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Federal Reserve: Optimism in the Time of COVID; Businesses Seem Much Better Adapted to Remaining Open

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