Federal Reserve Chairman Jerome Powell is set to preview a significant shift in the bank’s approach to price and wage increases as the Fed faces intense political pressure.In a Thursday speech, Powell is expected to lay out how the Fed plans to fight years of low inflation that the bank fears could weaken the U.S. economy’s long-term growth potential. Fed watchers expect Powell to explain how the Fed will aim for an average of 2 percent annual inflation, its target for nearly a decade, instead of constantly trying to push inflation toward that specific level. The new approach means the Fed may allow inflation to run above 2 percent for longer periods of time instead of raising rates to prevent inflation from exceeding its target.ADVERTISEMENTThe Fed’s shift has been in the works for nearly two years. Powell and top Fed officials have acknowledged that long-held views about the connection between low unemployment and high inflation cannot explain why price and wage increases failed to meet the Fed’s target despite a 50-year low in joblessness.The Fed’s new approach is intended to maximize the economy’s ability to add jobs and boost wages while giving the Fed more room to fight future downturns. “What they’re… Read full this story
- Federal Reserve Hikes Interest Rates Again
- Federal Reserve Raises Interest Rates 1/4 Point
- The Federal Reserve Has Lost Its Way: Mike Cosgrove
- Federal Reserve chair: Decline in worker share of profits 'very troubling'
- Is the Federal Reserve Aiming for a Recession?: Mike Cosgrove
- Green New Deal: Finance Plan with Credit from Federal Reserve, ‘New Public Banks Can Be Created’
- Stocks gain as Federal Reserve lowers rate
- US economy added 213,000 jobs in June as unemployment rose to 4 percent
- US Rate Cut: San Francisco Fed Chief Supports More Easing
- Trump Economics Vindicated by March Consumer Spending, Inflation, and Income Data
- US inflation reaches 2.9 percent in June, highest in 6 years
- Fed Chief: 2018 Best Year Since Financial Crisis
- Inflation Expectations Fall to Record Low
- Select Few Emerging Asian Economies Comfortable With Fed Hikes
- Fed Chief Jerome Powell Goes Populist
- Fed Minutes Indicate Central Bank Plans to Keep Hiking Rates, No Threat to Economy from Trade War with China
- Fed Raises Interest Rates, Predicts Two More in 2018, Sees Economy Growing Faster
- The global economy is 'already on an irreversible path' to a downturn, Nomura says
- JPMorgan's ultimate guide to markets and the economy
- Fed’s Powell Says U.S. Economy Is Solid but Rest of the World Is Slowing Down
Federal Reserve chief to outline plans for inflation, economy have 401 words, post on thehill.com at August 26, 2020. This is cached page on The Best Articles. If you want remove this page, please contact us.