In a move that Chairman Jerome Powell called a "robust updating" of Fed policy, the central bank formally agreed to a policy of "average inflation targeting." That means it will allow inflation to run "moderately" above the Fed's 2% goal "for some time" following periods when it has run below that objective.
As a practical matter, the move means the Fed will be less inclined to hike interest rates when the unemployment rate falls, so long as inflation does not creep up as well. Central bank officials traditionally have believed that low unemployment leads to dangerously higher levels of inflation, and they've moved preemptively to head it off.
The chairman's speech began two minutes before the scheduled 9:10 a.m. ET embargoed release that financial markets had been expecting. His remarks did not initially draw a strong market reaction, butPowell noted that the interest rate level that neither constrains nor pushes growth has fallen considerably over the years and is likely to stay there., when then-Chairman Paul Volcker ushered through a controversial series of rate hikes that sought to tamp down inflation.
Since the end of the financial crisis, the Fed has struggled to hit its 2% inflation target. Officials hope that the new approach will change the landscape, raising expectations and allowing inflation to float higher.In addition to the shift on inflation, the Fed also announced a policy tweak that changes the approach to employment.
What a sham. Seriously guess he couldn't put another few trillion into the markets
What a puppet in the hands of Trump. The future generations will suffer greatly
Welcome to stagflation. What can we learn from the Japanese model?
When do you predict this is all going to blow up? Funny no reporting on THAT?
Following trump’s orders?
Who ultimatley will benefit from zero interest rates?
Sounds like he caved to trump. When is CNBC going to talk more about the fact the bond market is illiquid and the USA is buying its own debt. What companies is the Fed and treasury propping up? Come on don’t worry about the negative ratings.
Today stock and bond markets are as a casino set up on a TRUMP hotel, and co-managed by the FED, with a roulette wheel whose croupier is Jerome Powell...Control is lost a while ago, like the risk versus return ratio and asset prices are totally distorted
It’s not a new approach. It’s called keeping the markets propped up until the election is over.
This son of a b....
Madman. Bring back Volcker or a reasonable facsimile.
Just keep ridin' that Bull, Cowboy Jay, and hope you don't fall off and get gored or trampled on.
Including the rates on Fixed Savings accounts, it's already happening. Rates starting dropping again after his update today.
The economic principle that Powell is implementing is the Phillips Curve. Essentially, by letting inflation increase (Fed will not initiate any monetary policies), unemployment should decrease and strength the economy!
By the same guy who crashed the market cuz he was afraid of inflation that didnt exist 2 years
supervise bank chines ancient chine money movd world
And cause hyperinflation for the sake of the stock market.
The money printer is here to stay folks
steveliesman Isn’t this the ideology Trump was aggressively promoting when Powell / FED started raising interest rates several years back? Little connection between low unemployment and inflation. Time FED had more diverse ( private sector businessmen) viewpoints Not just bankers/ economists
steveliesman ‘Volatility’ is the new danger ☢️🆘 word for the markets. Any and everything to keep it from happening. Must resume slow melt up at all costs
steveliesman I thought its Hufner...
steveliesman Not surprising the Fed gets defensive now that political pressure over the years has backed it into a corner with no bullets left to fire. We should not have been cutting rates when at full employment. But I think we all know there was a certain “president” who argued otherwise.
steveliesman Corona-virus is from the minor chastisement before the major chastisement so they may turn (to Allah) Imam Nasser Mohammad Al-Yemeni 05 - 03 - 2020 AD | 📬🔻
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This is why we
He also indicated that if inflation gets to high, they are ready 2 act against it. Not 2 mention this has been the defacto policy for years, so it's not that revelatory Yet people read what they want in 2 what they read/hear
‘Inflation is too persistently low’ is a phrase a non-banker/non-plutocrat would ever say. Middle Class Translation: ‘You will pay a lot more for staples while we pad our accounts before the inevitable burst’.
Lower forever.
Cheer down....
Feds have gone nuts is more apt headline!
Powell: “We have been unable to reach 2% for 10 years. So, we will let it go above 2%”. It’s like saying I haven’t been able to run an 8-minute mile, so I’ll let myself run it at 7. Who’s crazy here?
Powell has just screwed the middle/working class that works hard to SAVE their money. Savings accounts are a thing of the past thanks to FED. Most middle/working class people DO NOT have their money in the wall street casino. Inflation wasn't a problem but interest on savings is.
Can someone explain to me like I’m 5 why low inflation can be “dangerously bad for the economy”?
As if Fed can do anything to create inflation? They can’t. Just like BOJ. More debt = less inflation.
The plan is for senior citizens on Social Security to suffer from inflation even as the Fed keeps handing out free money to billionaires and hedge funds.
Goddamn that spin was one hell of a stretch
Brrrrrrrrt, that’s the new policy?
Has the “Powell Pump” been trademarked yet?
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