Bloomberg have a nice story today about the possibility of an explicit Fed inflation target. I’d also noted the uptick in speeches on the subject recently such as those by Dennis Lockhart and Charles Plosser.
The way I’ve understood it since taking on this job is that a large majority of the FOMC, led by Ben Bernanke, would like to adopt an explicit inflation objective. It was heavily discussed last autumn as a way to anchor inflation expectations when the danger was deflation. Those discussions have continued, and with press conferences out of the way, an inflation objective is the obvious subject for the Fed’s working group on communications. Read more >>