Easing the Federal Reserve’s 2% inflation target would “squander” the central bank’s credibility and “set up chaos around the world,” St. Louis Fed president James Bullard said on Tuesday.
“To have a major central bank deviate from the international standard, I think would set up chaos around the world on inflation, and so I think it’s kind of a dangerous concept,” Bullard said to an economics forum in London when asked if the Fed might be willing to allow above target inflation as a way to lighten the pain of reducing it fully to target. “I do think it means higher for longer for [interest] rates.”
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