Fed should prepare to communicate inflation overshoot – IMF
International Monetary Fund urges Fed to continue on “very gradual” path in raising benchmark rate
The US Federal Reserve should be "clear" in its communication that it is willing to accept some overshooting of inflation, says a statement published by the International Monetary Fund today (June 22).
Given the likelihood and severity of downside risks to inflation and the potential for a downward drift in inflation expectations, the path for policy rates should accept some "modest, temporary overshooting" to allow inflation to approach the Fed's 2% medium-term target from above, IMF staff say
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