Fed president signals that he wants to change the language of the guidelines of his policy
President Federal ReserveWere, and,, and,, and,, and,.. Jerome PowellCentral Bank leaders will consider changes in important parts of the framework that guides their monetary policy decisions, including the process of assessing the job deficit USA And how they solve your inflation goal.
By 2020.
They signals that they do not prevent interest rates during the low unemployment period to prevent potential inflation stresses, attempt to reduce “deficits” than their maximum employment goal.
Officials suggest that it is appropriate to re -examine the language around the deficits. And at our last week’s meeting, we have a similar view of the average inflation goal, “Powell said at a research meeting on the Fed’s monetary policy framework on Thursday.
Powell admits that the current structure is constantly explained at the moment of low interest rates and low inflation. Critics have argued that this is a high adaptation of restricted economic conditions.
“We guarantee that our new consensus statement is strong to widespread economic environments and consequences,” he said.
Officers Fed This year’s central bank’s strategy – or arcouso – has begun a long -term review to implement monetary policy and its communication tools.
This structure acts as a guide to the authorities Federal Open Market CommitteeIt defines interest rates, but attempts to achieve wide goals given to the Congress Committee to promote consistent prices and maximum employment. Fed officials target 2%inflation.
After the last review, completed in 2020, the Fed It has adopted a new structure intended to reach inflation moderately more than 2% for “some time”, after the period of inflation is less than this level – the policy of medium inflation is the simplest target of inflation.
One important thing in 2020 is to maintain the long -term expectations of Americans for inflation close to 2%. “Everything we do is essential for anchorage, and we are fully committed to the 2% target today,” he said.
However, he said that the economic climate has changed significantly since 2020, and the current revision of the structure reflects the evaluation of Fed leaders on these changes.
“We can enter the more frequent and more continuous supply of shock period – a difficult challenge for the economy and central banks,” he said.
Pavel said that central bank leaders were limited to less zero barrier – while providing less space to the authorities to support the economy when already needed low interest rates – “no longer the basic scenario.” But he said, “Wisdom will continue this danger,” he said.
The Fed President does not mention the maximum employment of the current language of the “wide and inclusive” target structure.
Some Fed observers have pointed out why the Central Bank has delayed the increase in interest rates in response to the epidemic in response to the epidemic and that the authorities are overly aware of the goal of employment.
Powell rejected the idea that the framework was responsible for the delay in the response. Instead, he pointed out the judgment of the authorities at the time – it was later proved that it was wrong – the epidemic inflation was temporary.
Powell said the Central Bank is expected to complete his review on the current construction by the end of September.
