Fed Up Claims Victory: Yellen Commits To Reconsidering 2% Inflation Target
Days after economists’ letter to Fed, Yellen says inflation target one of most important questions
06.15.17
NEW YORK – During a press conference after the Federal Market Open Committee announcement on Wednesday, Fed Chair Janet Yellen said that the Federal Reserve “will be reconsidering at some future time” its 2% inflation target.
Her comments come a few days after the Fed Up campaign organized and released a letter signed by 22 prominent economists calling on the Federal Reserve to reconsider its inflation target in order to protect the economy from future recessions and promote genuine full employment.
In response to a question from a journalist asking whether the Fed would reconsider the inflation target in response to the letter, Yellen said, “I would say that this is one of the most important questions facing monetary policy around the world in the future. We very much look forward to seeing research by economists that will help inform our future decisions on this."
Chair Yellen's commitment to reevaluating the inflation target are a departure from Yellen's previous stated position defending it. Responding to Yellen’s about-face, Fed Up Campaign Co-Director Shawn Sebastian, said, "Janet Yellen committing the Fed to reconsidering its outdated and harmful 2% inflation target is a significant, and needed, step in the right direction."
“We congratulate the 22 economists who signed an open letter last week urging the Federal Reserve to do this. Yesterday's comments by Chair Yellen are evidence of the impact of their voices. Yellen correctly emphasized that it is important for the Fed's decisions to 'be informed by a wide range of views and research, which is ongoing inside and outside the Fed.' With that commitment from the Chair in mind, we urge the Federal Reserve to adopt an official, open, transparent, and accessible process for conducting this reevaluation of the inflation target. Doing so will enhance the institution's credibility with the American people and the quality of its monetary policy for years to come."
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Fed Up is a coalition of community organizations, labor unions, and policy experts across the country calling on the Federal Reserve to reform its governance and adopt policies that build a strong economy for the American public. By keeping interest rates low and prioritizing genuine full employment, the Fed gives the economy a fair chance to recover and allows wages to grow across all communities
Contact:
Anita Jain, ajain@populardemocracy.org, 347-636-9761
