New York Times quotes Justin Wolfers on Fed's performance
Justin Wolfers was quoted in a New York Times article about efforts by the Federal Reserve Board to reduce unemployment and increase U.S. economic growth. While some economists have argued that the Fed has done all it can to improve the economy, Wolfers argues that it has not done enough.
"By their own framework, they're not doing enough," Wolfers told the New York Times. "They said that they were going to expand the economy and keep inflation around 2 percent, and they just haven't done it."
Annual inflation fell to 1.3 percent in December, and it is expected to linger well below 2 percent for the foreseeable future. In addition to cutting interest rates, the Fed can influence inflation by increasing the quantity of its asset purchases, which in September it announced it would do. However, Wolfers says the growth figures indicate purchases have not been assertive enough.
"They are doing $85 billion a month in purchases. Well, there's a number that's twice as large as 85 and twice as large as that," Wolfers told the New York Times. "It's clear that they can do more. But they keep saying one thing and doing another."