AUSTIN, Texas |
AUSTIN, Texas (Reuters) – The U.S. Federal Reserve may have more latitude to pursue easy-money policies if inflation runs below its newly-set 2-percent target, though such a move does not guarantee more jobs, a top central bank official said on Thursday.
Dallas Federal Reserve President Richard Fisher, usually a critic of the Fed’s aggressive actions to stoke employment, further tempered the comment with a strong endorsement of the Fed’s decision last week to formally acknowledge its limited ability to influence the labor market.
In a big step toward transparency, the central bank last week adopted the explicit inflation target. But it declined to likewise set a target for its other main concern, unemployment, arguing that monetary policy has little direct influence on jobs.
“To the extent that inflation is running below 2 percent, the Federal Reserve may have somewhat greater latitude to pursue accommodation,” Fisher said to a business audience here. “However, the past few years have demonstrated, yet again, that allowing
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