Federal Reserve Chairwoman Janet Yellen is proposing to try something that the central bank is not supposed to be able to do: improve the supply side of the economy.
Yellen has sketched out what could be a justification for keeping the Fed’s interest rate target lower for longer, influencing rates on products throughout the economy, including mortgages, credit cards, cars and more. It’s an idea that last popped up at the Fed twenty years ago, eliciting unease from a younger Yellen who was then a subordinate to Fed Chairman Alan Greenspan.
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