US Fed allows inflation to rise, won't raise interest rates
Aug 29 2020
Inflation for years has stayed below the 2.0 percent target, and Powell said the goal now is "to achieve inflation that averages two percent over time" although he stressed that it will not be tied "to a particular mathematical formula".
The policy shift, though telegraphed in recent statements, is a significant change for the Fed and central banking more generally, as inflation for decades has been the economic villain to be stamped out at every turn. USA 30-year yields earlier added as much as six basis points to its 10 basis-point move from Thursday after Powell said the Fed will seek inflation that averages 2 per centover time.
Fed Chair Powell said on Thursday the central bank would adopt an average inflation target, meaning rates are likely to stay low even if inflation rises a bit in the future.
"It's lower for even longer and the market was pretty much anticipating this".