So Gentle Ben Bernanke opposes Congress mandating that the Fed follow a policy rule because "
“The Fed already has a rule,” Mr. Bernanke said during a panel discussion at the Brookings Institution’s Hutchins Center on Fiscal and Monetary Policy. “It’s committed to hitting a 2% inflation target and aiming for the natural rate of unemployment. These are rules.”
Phone call for Ben Bernanke!! BB phone home!!
People, the Bernank has more Fedsplainin' to do. Look at this picture:
The article the graph came from was headlined "US Inflation undershoots Fed's 2% Target for 33rd straight month".
Maybe we should audit the Fed!!
3 comments:
The problem is that 2% is not a "target" in the normal sense of the word--the Fed treats it as an absolute ceiling. Were 2% a "target", we'd be equally concerned about 2.5% and 1.5%. However, the Fed is just fine with 1.5% and even 1.0%--while treating 2.5% as an impending disaster.
Also, the Federal Reserve targets the Fed inflation FORECAST. There are 2 different groups inside the FOMC offices. The FOMC targets the forecast of inflation made by others at the FOMC. THEY ARE NOT TARGETING ACTUAL INFLATION. The FED is ON TARGET - that is, they have accomplished a 2% inflation [high] forecast for a year from now. (They are still coming up short if you use the midpoint estimate as the yardstick of success. In which case they are still on track for 2% inflation in 2017.)
http://research.stlouisfed.org/fred2/series/PCECTPICTH
Hi Zachary: that is an absolutely epic trolling comment. You have a bright future.
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