For three decades, the Federal Reserve has believed that the path to economic prosperity is in fighting inflation. But it is realizing that is no longer enough.
The central bank for the first time is making a concerted attempt to shape the labor market, believing that reducing unemployment is the key to the recovery. It has tied billions of dollars of stimulus to the health of the labor market. It has vowed to keep interest rates at historic lows until the unemployment rate is at least 6.5 percent. Top officials have begun addressing the issue in increasingly urgent and personal tones.
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