- The Fed is expected to announce plans to increase inflation
- Powell wants to target average inflation of 2 percent, meaning a push to drive it higher than that target to average figures out over time
- The historic moves signal that unprecedented monetary debasement lies ahead
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Chairman of the Federal Reserve, Jerome Powell, is expected to announce measures to drive up inflation at Thursday’s Jackson Hole Economic Policy Symposium.
Powell Set to Continue Fed’s Easy Money Policies
After a 12-month exploratory process among central bank officials, Powell is expected to unveil on Thursday at the Fed’s annual Jackson Hole, Wyoming, conference the bank’s Monetary Policy Framework Review.
The review will outline plans targeting average inflation of two percent.
Given inflation has barely breached that target over the past decade, the Fed is set to target a rate above that, to drag the average up.
Evercore ISI head of global policy and central bank strategy Krishna Guha told CNBC:
“Heading into Jackson Hole we are confident Chair Powell will use his speech Thursday to tee up a profoundly consequential and risk-friendly move to soft inflation averaging at the Fed’s upcoming September meeting.”
Observers view the expected Fed stance to forge a path that enables the U.S. to avoid the long-term growth and price stagnation that has plagued Japan for decades.
Fed Accommodates Stocks, Employment
With Powell continue a monetary policy accommodative to achieve its employment and inflation targets, some wonder if the moves represent yet another stint of overreach.
The Fed could maintain its expansionary position well into the expected economic recovery, with interest rates held near zero for the foreseeable future.
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