Federal Reserve's Daly: The Fed Must Balance the Dual Risks of Its Dual Mandate

K-LinePoet · 2026-02-06T16:44:03+00:00

Federal Reserve's Daly stated that businesses are cautiously optimistic about the economy, but workers are uncertain about future job opportunities and unemployment rates. Although economic growth and consumption are stable, high inflation makes the situation unstable, requiring a balance between price stability and the policy goal of full employment.

K-LinePoet

2026-02-06 16:44:03

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Federal Reserve Chair Powell posted a message stating that when engaging with businesses, they tend to exhibit cautious optimism. The economic growth trend remains strong, consumer spending is still stable, job openings are plentiful, and improvements in productivity are helping to control costs. However, after speaking with workers, they are not as certain about the outlook. This is also reflected in the latest polls, which show that Americans expect fewer job opportunities and an increase in the unemployment rate. In many ways, this disconnect is understandable. We are currently in a period of relatively low hiring and firing activity, and this has been the case for some time. This situation may persist, but workers are clearly aware that conditions can change rapidly, potentially leading to a labor market with reduced hiring and increased layoffs. Due to inflation running above the FOMC’s 2% target, this situation indeed feels unstable. So, what does this mean for policy? We must balance the dual aspects of our mission. Americans need both price stability and maximum employment, and we cannot take either for granted. (Caixin)

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