The Fed is expected to use a new pandemic-era tool to fight a long-running battle against low inflation
Federal Reserve Chairman Jerome Powell speaks at his news conference following the two-day meeting of the Federal Open Market Committee (FOMC) meeting on interest rate policy in Washington, January 29, 2020.
Yuri Gripas | Reuters
Even before Covid-19 crushed the economy, the Fed was worried about low inflation and was working on ways to let it run slightly hotter temporarily in order avoid the trap of long-term sluggish growth and weak pricing power.
Chairman Jerome Powell, in a much-anticipated speech Thursday, is expected to discuss the Fed’s policy framework and specifically how it will alter its posture on inflation. The Fed has had a 2% inflation target, but in the decade since the financial crisis it has more often than not seen inflation fall below its target.
The way the Fed is expected to meet its goal is to say it …continued .
[Source: CNBC News]