Side by Side Comparison of FOMC Statements and Notes

Below points from Chair Powell’s opening remarks are worth noting:

May Employment Report - Even after the unexpectedly positive May employment report, nearly 20 million jobs have been lost on net since February, and the unemployment rate has risen about 10 percentage points, to 13.3 percent. As was highlighted by the Bureau of Labor Statistics, this figure likely understates the extent of unemployment; accounting for the unusually large number of workers who reported themselves as employed but absent from their jobs would raise the unemployment rate by about 3 percentage points. In particular, the rise in joblessness has been especially severe for lower-wage workers, for women, and for African Americans and Hispanics.

Clarification on Fed taking Credit Risk - I would stress that these are lending powers, not spending powers. The Fed cannot grant money to particular beneficiaries. We can only create programs or facilities with broad-based eligibility to make loans to solvent entities with the expectation that the loans will be repaid. Many borrowers will benefit from these programs, as will the overall economy. But for many others, getting a loan that may be difficult to repay may not be the answer. In these cases, direct fiscal support may be needed

Yield Curve Control - We also reviewed the historical and foreign experience with targeting interest rates along the yield curve. Whether such an approach would usefully complement our main tools remains an open question

 Racial Injustice - Finally, I want to acknowledge the tragic events that have again put a spotlight on the pain of racial injustice in this country. The Federal Reserve serves the entire nation. I speak for my colleagues throughout the Federal Reserve System when I say there is no place at the Federal Reserve for racism and there should be no place for it in our society.