Federal Reserve facing criticism from Bernanke and Yellen about their policies
In the last one year, the Federal Reserve officials of the United States have been becoming more and more open about everything that the monetary policy is not able to do for the growth of the economy. In the month of November for instance, the chair of Fed Jay Powell had made a suggestion that Congress must consider the ways of helping in training the workers or making it easier for the women to exist in the labor force. Ben Bernanke and Janet Yellen who are the Former chairs of the Fed are now sending one more message. In case a downturn is on the horizon, there may be a chance that the Fed will not be able to deal with it alone. The monetary policy although it does have a role to play meaningfully in the future slowdowns, there is a likelihood that this role is not going to be sufficient in the future as per Yellen who had been addressing a conference of the economists in San Diego this Sunday. Powell has been pleading for the structural policies which increase the ability of America to be growing over the longer-term despite the business cycle upturns and downturns. In contrast, Bernanke and Yellen have been concerned about the policies being cyclical and their ways of responding to a possible recession. That is because there is a decreased scope of any monetary stimulus. The natural rate of interest of United States which is the rate without intervention is higher than what it is in Europe and also in Japan. This reflects the higher economic growth levels in the United States although the rate has fallen in the last few decades to 0.6% in the end of 2019.