Fed may adopt Inflation Targeting

[chinaco]

Fed Officials Said to Discuss Adopting Inflation Target Backed by Bernanke - Bloomberg


Fed’s Lockhart Calls For Explicit Inflation Target Of 2% - Real Time Economics - WSJ

It sounds like they have an unofficial 2% rate anyway.

I wonder if this is just another way of saying: The Fed is going to raise rates and balance inflation with the desire for job growth to combat unemployment?

It may be painful... but it is time to get on with it.

Bottom line: we do not want to follow Japan with 0% interest rates for a decade or longer! http://www.tradingeconomics.com/japan/interest-rate

 

[LARS]

Fed Officials Said to Discuss Adopting Inflation Target Backed by Bernanke - Bloomberg


Fed’s Lockhart Calls For Explicit Inflation Target Of 2% - Real Time Economics - WSJ

It sounds like they have an unofficial 2% rate anyway.

I wonder if this is just another way of saying: The Fed is going to raise rates and balance inflation with the desire for job growth to combat unemployment?

It may be painful... but it is time to get on with it.

Bottom line: we do not want to follow Japan with 0% interest rates for a decade or longer! Japan Interest Rate

Unfortunately I think you are dreaming if you think the triumvirate of Bernanke, Yellen, Dudley are anywhere near ready to raise rates. Not going to happen.

And while I agree with you that we have to be careful about becoming Japan, I'm afraid our arrogant FED seems to think they are immune to the forces that have dragged Japan into the economic muck.

 

[teejayevans]

When you throw out anything with high inflation (food, energy, health care), making the 2% target will be a piece of cake.
TJ

 

[arebelspy]

When you throw out anything with high inflation (food, energy, health care), making the 2% target will be a piece of cake.
TJ

? Explain how you think those are "thrown out"

 

[teejayevans]

Search for "core inflation", also search for "Dudley ipad fed".
TJ

 

[chinaco]

Look at core cpi vs cpi-x

Core Inflation Definition

They are using it as an indicator to try to make sense of future inflation that is not due to a temporary fluctuation... often with goods that are based on commodity prices.

You can argue about it and legitimately criticize the accuracy... but economics is not very precise. No measure is going to be dead accurate.