Economics
Brainard Sees Risks in Price-Level Targeting for Federal Reserve
- Central bankers coping with inflation misses and low rates
- Price-level target risks shaking confidence in inflation goal
Rosengren Sees 2018 Underlying Inflation Close to 2%
This article is for subscribers only.
The Federal Reserve’s continuous miss of its 2 percent inflation target is “an important consideration” for monetary policy, Fed Governor Lael Brainard said, though proposals to make up for time spent under the goal also have their own risk.
“Frequent or extended periods of low inflation run the risk of pulling down private-sector inflation expectations, which could amplify the degree and persistence of shortfalls,” Brainaird said Thursday in the text of her remarks at the Peterson Institute for International Economics in Washington. That puts the central bank more at risk of hitting the zero lower boundary on its policy rate, she noted.