Fed should target inflation range – Boston president
Policy is similar to price level and inflation averaging targets, but is easier to explain, Rosengren says
The Federal Reserve should adopt an inflation targeting range to provide the central bank with more monetary policy space during a recession, the president of the Boston Fed, Eric Rosengren, said in a speech on April 15.
Rosengren advocated an inflation target of between 1.5% and 2.5%, where inflation could be allowed to fall below target during a recession, provided it is made up for in “good times”. The target would aim to achieve 2% on average over the economic cycle, he said.
The Fed has
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