{"id":28414,"date":"2017-05-06T09:55:50","date_gmt":"2017-05-06T09:55:50","guid":{"rendered":"http:\/\/www.biphoo.com\/bipnews\/?p=28414"},"modified":"2017-05-06T09:55:50","modified_gmt":"2017-05-06T09:55:50","slug":"fed-williams-pushes-new-approach-to-u-s-inflation-goal","status":"publish","type":"post","link":"https:\/\/www.biphoo.com\/bipnews\/business\/fed-williams-pushes-new-approach-to-u-s-inflation-goal.html","title":{"rendered":"Fed Williams pushes new approach to U.S. inflation goal"},"content":{"rendered":"

\n\tFed Williams pushes new approach to U.S. inflation goal<\/span><\/span><\/span><\/strong>
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\n\tOne of the Federal Reserve's experts on navigating a world of low inflation and economic growth said on Friday the U.S. central bank should seriously consider ditching its old policy framework for a new approach to hitting its price-level goal.<\/span><\/span><\/span>\n<\/p>\n

\n\tIn a speech, San Francisco Fed President John Williams did not comment specifically on interest rate hikes or on recent economic activity.<\/span><\/span><\/span>\n<\/p>\n

\n\tInstead he praised the advantages of a so-called price-level targeting regime over the Fed's current regime of a simple 2-percent target. The central bank's preferred inflation measure has been below this goal for some five years, though prices have recently edged higher.<\/span><\/span><\/span>\n<\/p>\n

\n\t"I believe that a price-level framework merits very serious consideration for central banks including the Fed," Williams, who does not vote on policy this year under a rotation, said in a speech to the hawkish-leaning Shadow Open Market Committee.<\/span><\/span><\/span>\n<\/p>\n

\n\tAs it stands, the central bank sets rates to keep unemployment low and to also hit 2-percent inflation as much as possible, irrespective of how long prices have lingered below or above target. On the other hand, price-level targeting would oblige the Fed to make up for years of excessively low inflation by pushing it above target for a similar period, and vice-versa.<\/span><\/span><\/span>\n<\/p>\n

\n\t"Baked into its very design is a 'lower for longer' policy prescription in response to sustained low inflation," added Williams, who has floated a handful of new policy approaches over the last year including simply raising the inflation target.<\/span><\/span><\/span>\n<\/p>\n

\n\tSome economists and former Fed officials have also floated price-level targeting, though most central bankers say such a reform would provide little benefit and confuse investors and the public.<\/span><\/span><\/span>\n<\/p>\n

\n\tWilliams, a former top advisor to Fed Chair Janet Yellen, has previously said he expects three or four rate hikes in 2017. The Fed has raised rates once so far this year.<\/span><\/span><\/span>\n<\/p>\n

\n\tsource:-http:\/\/www.reuters.com\/article\/us-usa-fed-williams-idUSKBN1811VT<\/span><\/span><\/span><\/p>\n

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