Fed’s floor could be ‘junked’ if credit surges – Goodhart

Charles Goodhart

The Federal Reserve will be forced to abandon its floor system for setting rates “if and when” major inflationary pressures return, argues UK-based economist Charles Goodhart.

The floor system is effective only in the current deflationary environment when borrowing activity is relatively subdued, the former Bank of England monetary policy committee member says. “It will survive and survive very comfortably, as long as we have deflationary headwinds,” he says.

Not all economists agree the

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@centralbanking.com or view our subscription options here: http://subscriptions.centralbanking.com/subscribe

You are currently unable to copy this content. Please contact info@centralbanking.com to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Central Banking? View our subscription options

If you already have an account, please sign in here.

You need to sign in to use this feature. If you don’t have a Central Banking account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account