, Columnist
The Fed Must Attack Low Inflation
And it needs to act at its meeting next week.
Do what he says.
Photographer: Drew Angerer/BloombergThis article is for subscribers only.
The U.S. economy remains weak, with inflation expected to remain below the Federal Reserve's target for years to come. When the central bank holds its policy-making meeting next week, it should take decisive action to end the malaise.
Charles Evans, president of the Federal Reserve Bank of Chicago, has suggested a good plan: Hold off on any further interest-rate increases until core inflation (excluding volatile food and energy prices) returns to the Fed's target of 2 percent "in a sustainable way." His thinking is that central banks know how to address high inflation (just raise interest rates) but have a much harder time dealing with inadequate inflation, so the Fed should place much more emphasis on avoiding the latter.