The Federal Open Market Committee's meeting minutes for July will be released at 2 p.m. ET.
The Marriner S. Eccles Federal Reserve building stands in Washington, D.C., U.S., on Tuesday, Aug. 18, 2020.The U.S. central bank will be faced with a delicate balancing act if it opts to embrace a more relaxed view on inflation, according to a former governor of the Federal Reserve.intensifying speculationA move to adopt an average inflation target would see the Fed aim to push inflation above the usual target of 2% for some time to make up for the years of it being below these levels.
"Traditionally, the Fed has said: 'Well, we have a 2% goal and if inflation starts to get close to 2% or above that, we are going to raise rates, we are going to tighten.'" "They want to try to give the guidance that they really want inflation to get up and be sustained above 2% to make up for it being below 2% for so long. But, they don't want to go so far to get people to think: 'Oh my goodness, the Fed has forgotten about being tough on inflation and we can see inflation going to 3% or 4%.'"
The Fed and other central banks across the globe have been trying to boost consumer prices for years under the reasoning that a low level of price appreciation is healthy for a growing economy., keeping interest rates at historically low levels and giving policymakers little room to ease monetary policy during economic downturns.
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