Powell Sets Fed's Sights on Third Mission, Calling It Derivative of Other Two

BlockBeats News, September 18th - Federal Reserve Chairman Powell answered questions about the central bank's statutory requirement to achieve "moderate long-term interest rates" at a press conference on Wednesday after the interest rate decision. He explained why the three missions Congress has given to the Fed can be boiled down to two tasks in practical operation. For a long time, central bank officials have positioned their mission as a dual mandate, with the focus of monetary policy being to maintain low and stable inflation and ensure a strong job market, with the third mission being less emphasized.

Powell told reporters that the third task does exist, but in the view of central bank officials, it is a derivative of the two better-known statutory goals. He said: "We see that moderate long-term interest rates are the outcome of achieving low and stable inflation and maximizing employment." For some time, Fed officials have not believed that the third mission needs to be "pursued independently." (FXStreet)