Federal Reserve Vice Chairman Janet Yellen backed a proposal to link the Fed’s zero interest-rate policy to progress toward meeting its goals for inflation and employment rather than to a calendar date.
“The Committee might eliminate the calendar date entirely and replace it with guidance on the economic conditions that would need to prevail before liftoff of the federal funds rate might be judged appropriate,” Yellen said today in the text of remarks prepared for a speech in Berkeley, California. She is “strongly supportive” of such a change, she said.
Janet Yellen, vice chairman of the U.S. Federal Reserve, today joined three other Fed officials who have endorsed tying zero interest rates with progress on fighting unemployment as a way to provide more clarity on the central bank’s outlook for monetary policy. Photographer: Kiyoshi Ota/Bloomberg
Yellen today joined three other Fed officials who have endorsed tying zero interest rates with progress on fighting unemployment as a way to provide more clarity on the central bank’s outlook for monetary policy. The policy-setting Federal Open Market Committee said last month it expects to keep its benchmark rate near zero through at least mid-2015.
“Under such an approach, liftoff would not be automatic once a threshold is reached,” Yellen said at the University of California at Berkeley, where she is a professor emeritus. “That decision would require further Committee deliberation and judgment.”…
Choosen excerpts by JMM from
En français @:
Janet Yellen, la vice-présidente de la Fed, a expliqué ce jour qu’elle était favorable à une politique de taux plus clairement conditionnée à des niveaux spécifiques de chômage et d’inflation. Il s’agirait donc d’un nouveau changement radical de communication pour la Banque, qui s’est pour l’heure engagée à maintenir ses taux au plancher jusqu’au milieu … Lire la suite »