Economics
Fed Puts Inflation Expectations at Heart of Major Policy Review
- Theory is key to strategies to help Fed hit 2% inflation goal
- An article of faith at the Fed faces its real-world skeptics
The Marriner S. Eccles Federal Reserve building in Washington, D.C.
Photographer: Andrew Harrer/Bloomberg
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For four decades the specter of high inflation haunted the Federal Reserve. Now it has an equally ominous flip side.
“We need to make sure inflation doesn’t keep slipping down toward zero, because then the central bank really does have less and less ability to react to downturns,’’ Fed Chairman Jerome Powell said during a Q&A at Stanford University on March 8.