WASHINGTON - A top Federal Reserve official believes that the U.S. central bank needs to re-orient its thinking and policies toward fighting inflation that is too low, rather than its historic focus on keeping inflation from getting too high. John Williams, president of the New York Federal Reserve Bank, said Thursday that the current environment of low inflation and low interest rates will likely persist for years. The Federal Reserve launched a review last year of its policy framework and tools in light of the challenges presented by low inflation and low borrowing costs. At the same time, inflation has remained stubbornly below the Fed’s 2% inflation target for most of the past seven years. While few people are concerned by low inflation, the Fed prefers to maintain a cushion against deflation, a destabilizing drop in prices and wages.

Source: thestar January 09, 2020 18:22 UTC