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Federal Reserve to target 2% average inflation, elevates focus on jobs

Under the new approach, the US central bank will seek to achieve inflation averaging 2% over time, offsetting below-2% periods with higher inflation "for some time"

US Federal Reserve
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Powell laid out a case for why low unemployment is a positive for the economy, especially for less-advantaged groups like Blacks.

Reuters
The Federal Reserve on Thursday rolled out an aggressive new strategy to restore the United States to full employment and lift inflation back to healthier levels in a world where it now believes that "downward risks to employment and inflation have increased."

Under the new approach, laid out in a fresh statement on the Fed's longer-run goals and monetary policy strategy approved by all 17 of its policymakers, the US central bank will seek to achieve inflation averaging 2% over time, offsetting below-2% periods with higher inflation "for some time," and to ensure employment doesn't fall short of its maximum level.

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First Published: Aug 27 2020 | 10:21 PM IST

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