The Limits of the Fed

King Ben I

Though some believe the Federal Reserve has too much power, no one disputes the limitations it and other policy-makers face.

Recently the Commerce Department revised its estimate of economic growth to 1.7 percent. That growth represents a deceleration from the 2 percent pace in the first quarter. The economy needs to grow at 2.5 to 3 percent a year to substantially reduce unemployment, which is at 8.3 percent.

And yet another sign of a tepid economy, this week a Federal Reserve report found similar evidence of our slow growth economy with its persistently high unemployment.