S&P Global, October 30, 2020, Fed’s Focus On Racial Inequalities Could sharpen Under Dem Sweep
The Federal Reserve has took the initiative to centralize it’s focus on combatting the longstanding racial disparities and the additional impacts of the COVID-19 Pandemic. The Pandemic has proven to aggravate the already daunting racial disparities that plague the U.S Federal system, therefore the Fed has publicized concerns on the matter. The concern from the Fed has given rise to their possible action to ‘steering the U.S economy and regulating the banking system’.
The Federal Reserve is grappling with how it could play a larger role in tackling longstanding racial disparities in the U.S. economy, even as the COVID-19 pandemic reverses recent progress.
The pandemic has had a disproportionate impact on people of color, who have lost their jobs and are dying from the virus at a faster rate. It has also underscored existing wealth gaps in the U.S. economy that put them on shakier financial footing heading into the severe downturn brought on by the pandemic.
Fed leaders have spoken openly about those concerns this year, a focus welcomed by economists and policy experts who have continually pressed the central bank to acknowledge those wealth barriers. They also say they hope the Fed’s worries will lead to concrete actions, given its role in steering the U.S. economy and regulating the banking system.
“This really does actually open the door for the Fed to possibly be the leading agent” in making the economy more equal, said Mayra Rodríguez Valladares, a banking industry consultant who started her career as a New York Fed analyst.
The Fed’s focus on narrowing racial gaps could sharpen if Democrats sweep the 2020 elections. Former Democratic Vice President Joe Biden’s platform calls on the Fed to “aggressively enhance” its monitoring of racial disparities in the economy and diversify the Fed’s mostly white leadership. Democrats have also introduced legislation that would explicitly add the elimination of racial disparities to the Fed’s mandates.