Economics
Powell Aims to Dodge Japan Deflation Trap With Dovish Fed Tilt
- Calls low inflation ‘one of the major challenges of our time’
- Fed signals no rate increases this year amid risks to outlook
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Almost 40 years after Paul Volcker brought the U.S. economy to its knees to bring inflation down, Federal Reserve Chairman Jerome Powell and his colleagues are on a mission to stoke price pressures and avoid a Japan-like deflationary trap.
Declaring that too-low inflation was “one of the major challenges of our time,’’ Powell left open the possibility on Wednesday that the Fed’s next interest-rate move might be a cut after four increases last year.