Fed governor urges central bank to pretend there's no inflation

Fed Should Be Cautious in Face of Weak U.S. Inflation, Fed Governor Brainard Says

By Jonathan Spicer and Stephanie Kelly
Reuters
Tuesay, September 5, 2017

NEW YORK -- Inflation is falling "well short" of target so the Federal Reserve should be cautious about raising interest rates any further until it is confident that prices are headed higher, an influential Fed policymaker said today.

In a dovish speech in the face of months of weak inflation readings, Fed Governor Lael Brainard said the U.S. central bank should go so far as to make clear it is comfortable pushing prices modestly above the Fed's 2-percent target.

Brainard, a permanent voter on the Fed's monetary policy who has in the past convinced colleagues to delay tightening, seized on a core price reading that has dipped to 1.4 percent and has remained below a 2-percent target for five years.

"We should be cautious about tightening policy further until we are confident inflation is on track to achieve our target," Brainard said in a speech in New York. ...

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http://www.reuters.com/article/us-usa-fed-brainard/fed-should-be-cautiou...