Yellen Rejects Idea of Fed Raising 2% Inflation Target -Breaking
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© Bloomberg. Janet Yellen is the US Treasury secretary. She spoke at a press conference in Koenigswinter (Germany) on the sidelines to the G7 meeting for central bank governors. Yellen said that it’s understandable the dollar has appreciated amid rising US interest rates, and that these gains have posed a concern for some other countries.(Bloomberg). – Treasury Secretary Janet Yellen rebuffed any suggestion that the Federal Reserve, or one of its counterparts, should raise their inflation targets. Given the importance to stable price expectations in a period when living expenses are rising rapidly and the Federal Reserve is unable to meet them at the same time as they do now, Janet Yellen was criticized by the Treasury Department.
“I don’t immediately see that as a reason to change,” the inflation target, Yellen told reporters Thursday in Bonn, Germany, referring to the potential for deglobalization to boost the trend rate of price increases. “The challenge is to meet the inflation targets that have been established.”
US consumer prices rose by over 8% in the past 2 months. Economists wonder if the Fed will ever be able bring them down to the 2% target. That’s in turn spurred speculation the Fed may need to boost its target.
Yellen will be in Bonn to attend meetings of central bank governors of Group of Seven advanced economies and finance ministers. She said at Thursday’s gathering, a key message among the group was that it will “stand by” Ukraine, with a fresh commitment of support coming.
©2022 Bloomberg L.P.
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