By Peter Schroeder - 03/14/14 11:28 AM EDT
A group of Democrats is urging the new head of the Federal Reserve to not forget about the unemployed as she steers the nation’s central bank.
The 21 House lawmakers told Chairwoman Janet Yellen that given the inability of the current Congress to get anything done, the Fed should be looking for additional novel tools to boost the economy and get people back to work.
“Given the current political realities, monetary policy remains an essential vehicle for reducing unemployment,” they wrote Thursday. “It is our hope that, in addition to continued expansionary monetary policy, the Federal Reserve will explore options beyond quantitative easing to boost the economy as directly as possible.”
The Fed is trying to make its exit from years’ worth of stimulus for the economy. It purchased trillions of dollars of bonds in a bid to further lower borrowing costs and spur the economy through three rounds of “quantitative easing.”
Now, the Fed is slowing the rate of its purchases, eventually stopping them altogether. At the same time, Yellen and other top Fed officials have said they do not expect to raise interest rates from their near-zero level anytime soon.
The Fed has also said it is prepared to take steps to support the economy if the recovery falters, but officials have made no indication that any new steps are in the works.
Reps. John Conyers Jr. (D-Mich.) and Frederica Wilson (D-Fla.) led the effort to urge Yellen to keep the jobless in mind. The letter was signed by many liberal Democrats, including co-head of the Congressional Progressive Caucus Raúl Grijalva (D-Ariz.) and several members of the Congressional Black Caucus.
Under law, the Fed has a dual mandate of controlling inflation and maximizing employment. But some Republicans, critical of recent Fed policy, have suggested the central bank would be better off focusing solely on keeping prices in check, leaving the job of boosting employment to other policymakers.
Yellen took the reins of the Fed in February, following the exit of former Chairman Ben Bernanke.