Philip N Jefferson: Economic mobility and the dual mandate

Speech by Mr Philip N Jefferson, Vice Chair of the Board of Governors of the Federal Reserve System, at the Economic Mobility Summit, hosted by the Federal Reserve Bank of Philadelphia, Philadelphia, Pennsylvania, 22 April 2025.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Thank you, Dr. Singleton, for the kind introduction and for the opportunity to speak here today. It is great to be back in Philadelphia, and I look forward to today's discussions on economic mobility.

As monetary policymakers, my colleagues and I on the Federal Open Market Committee do not have direct control over economic mobility in the U.S. Our key monetary policy tools are not designed to address this issue, nor is economic mobility part of our mandate. However, our dual mandate of maximum employment and price stability has implications for a wide range of economic outcomes, including economic mobility. This leads to many important questions about the relationship between the dual mandate and economic mobility. In my remarks, I want to address two such questions. First, does meeting the dual mandate facilitate economic mobility? And second, does economic mobility matter for the conduct of monetary policy?

In today's talk, I will discuss my views on these questions, but I will not be able to provide definitive answers. Rather, I hope that posing these questions and relaying some of my own thoughts will lead to further discussions during this conference and beyond. Before turning to these questions, let me start with a brief overview of intergenerational mobility in the U.S.

Taking Stock of Economic Mobility

Economic mobility, the ability to move up the economic ladder, is at the heart of the American dream. We tell our children that in the U.S., if you work hard and play by the rules, you can have a secure and successful financial future no matter where you start. We continue to believe strongly in this part of the American dream and remain optimistic that hard work is a primary determinant of later-life success. In a survey from 2019, when respondents were asked which factors are essential or very important to getting ahead in life, nearly 90 percent identified hard work, and only 30 percent indicated coming from a wealthy family.