Craig Torres, Steve Matthews and Joshua Zumbrun
Bloomberg.com
6/15/2011
Federal Reserve officials are discussing whether to adopt an explicit target for inflation, a strategy long advocated by Chairman Ben S. Bernanke and practiced by central banks from New Zealand to Canada, according to people familiar with the discussions.
The talks coincide with Fed efforts to spur growth and reduce unemployment without fueling higher prices. An inflation target could help quiet critics of record monetary stimulus and anchor public expectations for consumer prices should the Fed in coming months try to spur the recovery by keeping interest rates close to zero for longer.
“My sense is that this may be a done deal, though not one likely to be implemented soon, and perhaps not until economic conditions return to closer to normal,” said Laurence Meyer, senior managing director and co-founder of Macroeconomic Advisers LLC and a former Fed governor. “The chairman is obviously for it, and it is hard to find anybody on the FOMC who now is really opposed to it.”
Calls by policy makers for an inflation target have grown in recent months, with Fed bank presidents in Atlanta, Richmond, St. Louis, Philadelphia and Cleveland supporting such a move. Atlanta Fed President Dennis Lockhart said on June 7 said it’s time “to reaffirm in explicit terms the central bank’s commitment to delivering its piece of the package of fundamentals needed to assure a durable and lasting recovery.”
The article continues at Bloomberg.com
Related: Ctrl+Alt+Bernanke (Fox Business video) Hacker group “Anonymous” threatens cyber attacks against Ben Bernanke and the Federal Reserve. Professor Steve Horwitz discusses the threat and analyzes Fed policy.
“Will President Obama pressure Bernanke to turn on the money pump to get re-elected?” H/T Judge Andrew Napolitano on Facebook
