- Fed's Chair Powell says FOMC will target average inflation
Market news
27 August 2020
Fed's Chair Powell says FOMC will target average inflation
- Emphasizes that "maximum employment is a broad-based and inclusive goal"
- Shift motivated by underlying changes to the economy including lower potential growth and persistently lower interest rates and low inflation
- Fed likely to be constrained by its effective lower bound more frequently than in past
- Fed not tying itself to any particular method to define "average" inflation
- Says Fed will "not hesitate to act' if inflation rises "above levels consistent with our goal"
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