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Strategies & Market Trends : Dino's Bar & Grill -- Ignore unavailable to you. Want to Upgrade?

To: Goose94 who wrote (12248)	3/23/2015 8:20:05 AM
From: Goose94	Read Replies (1) \| Respond to of 203653

What Is The Fed’s True Mandate? With the Federal Open Market Committee (FOMC) policy meeting in the rearview mirror, one former Fed member says the central bank may not be following the mandate it was given by Congress. “There is a big difference between the Federal Reserve’s mandate to maintain ‘stable prices’ – as enunciated in the Federal Reserve Act – and the Fed’s self-selected target of 2% annual inflation,” said Robert Heller, former member of the U.S. Federal Reserve Board of Governors, in a column posted on Project Syndicate Thursday. “So how is it that policymakers have managed to substitute the latter for the former?” he questioned. According to Heller, the 2% inflation objective is now at the forefront of FOMC decision making, adding that “increasing the rate of inflation is now the stated objective of Fed policy,” even if Congress did not give the Fed a mandate to pursue such a goal. “The Federal Reserve Act is explicit: the Fed should achieve ‘price stability’ for the U.S. currency, along with moderate interest rates and maximum employment. As long as inflation is somewhere between zero and 2%, the Fed should declare victory and leave it at that,” he said. In its latest policy meeting Wednesday, the FOMC reevaluated its inflation forecasts. For 2015, the central bank expects core Personal Consumption Expenditures (PCE), which strips out volatile food and energy prices and is its preferred measure of inflation, to rise between 1.3% and 1.4%, down from December’s forecasted range between 1.5% and 1.8%. A the same time, the monetary policy statement said, “the Committee expects inflation to rise gradually toward 2 percent over the medium term as the labor market improves further and the transitory effects of lower energy prices declines and other factors dissipate."