One has been so bored of reading FOMC statements that they are almost being ignored. The usual thing about inflation and unemployment is so much an overkill.
But Conor Sen points to this interesting new development. Fed is increasingly concerned about racial diversity in employment and reporting them as well. These are signs that Fed is going to be a more diverse place for employment as well:
The Federal Reserve gave two indications last week that one of its next structural pushes will be toward incorporating more diversity into how it conducts its business. For a variety of reasons, this evolution is likely to lead to a monetary policy with a more dovish bias than the institution has had in the past.
The first sign came in the release of the minutes from the September Fed meeting. For the third meeting in a row, the Fed commented on racial unemployment disparities, pointing out that “the unemployment rates for African Americans and Hispanics remained above the rate for whites.” The Fed also noted that for ages 25 to 64, the employment-to-population ratio was higher for whites than for blacks and Hispanics.
The second sign came in comments made by Minneapolis Fed President Neel Kashkari. “We cannot have confidence we are achieving maximum employment if we don’t understand what’s happening beneath the surface. … Understanding the composition of maximum employment is actually very important to us achieving the mandate that Congress has given us,” he said. Kashkari, whose parents immigrated to the U.S. from India, has previously said he will spend a day in the life of a struggling black family in order to better understand that experience.
This incorporation of demographic data in policy making isn’t the only way the Fed is looking to account for diversity. The Fed has increasingly been criticized by congressional Democrats for a lack of diversity on its staff. None of the Fed’s 12 regional branches has ever been led by a black or Hispanic president. Fed Chair Janet Yellen has pledged to increase diversity among the Fed’s ranks as it looks for a new Atlanta Fed president. With Louisiana, Mississippi, Alabama and Georgia, the Atlanta Fed branch includes four of the six states with the highest proportion of blacks in the country.
In the end, he says Fed is likely to look more at employment diversity than inflation as latter is hardly a concern now:
The future looks to be one with a more diverse Fed concerned more with achieving full employment in a variety of ways and less on elevated inflation, a focus that increasingly appears to be a relic of history.
This will be quite something if it happens.
And here in India, our central bank does not even think of regional representation in its overall policies. Though, in terms of employment Indian central bank could be more diversely employed given India’s affirmative policies. But the overall utility of this better representation can still be questioned. Does it really help address the wide regional and community differences in policies? On the face of it, it atleast does not seem to be the case..