Economics
Powell Planted Clue to Policy Switch With 2017 Inflation Pledge
- Then Fed governor stressed need to support 2% price target
- Inflation focus raises bar to more rate hikes, Goldman says
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The secret behind Federal Reserve Chairman Jerome Powell’s surprise U-turn on monetary policy can possibly be found in comments he made in New York a year and a half ago.
Asked how he’d respond to what was then a hypothetical scenario of below target price rises and low unemployment, Powell replied: “My own view would be that we have to be committed to our 2 percent inflation mandate and we’d need to conduct monetary policy in a way that supported inflation going up.’’