Great Read on the U.S. Federal Reserve from Bloomberg News: Three Federal Reserve presidents are calling for patience as the central bank weighs when to raise interest rates above zero, arguing moving prematurely poses a greater risk to the economy than waiting too long. “We should be exceptionally patient in adjusting the stance of U.S. monetary policy —- even to the point of allowing a modest overshooting of our inflation target to appropriately balance the risks to our policy objectives,” Charles Evans, president of the Chicago Fed, said yesterday in Washington. Recent reports show progress toward the Fed’s goals of full employment and price stability has slowed. Payroll growth in August cooled to 142,000 from 212,000 the month before. Prices as measured by Fed’s preferred gauge, the personal consumption expenditures index, rose 1.6 percent from a year earlier in July, compared with a gain of 1.7 percent in May. Inflation has been below the Fed’s 2 percent goal for more than two years. “Right now with inflation running below 2 percent, we really need the economy to run a little hot for at least some period of time to actually push inflation back up to our objective,” Dudley said Sept. 22 at the Bloomberg Markets Most Influential Summit in New York.
Posted on: Thu, 25 Sep 2014 23:48:09 +0000
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