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Jerome Powell targets 2% average inflation, focus shifts to jobs

Fed's new approach would allow for prices to overshoot target

Jerome Powell
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File photo of Federal Reserve chairman Jerome Powell

Jonnelle Marte, Ann Saphir and Howard Schneider | 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 per cent over time, offsetting below-2 per cent periods with higher inflation "for some time," and to ensure employment doesn't fall short

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First Published: Aug 28 2020 | 2:11 AM IST

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