Federal Reserve hits inflation target
Matthew Martin 8/15/2013 10:11:00 AM
2.0% inflation is an important threshold because it corresponds to the now-explicit inflation target, which was made public for the first time on January 25 2012. Much of the econosphere has complained that the Fed is allowing inflation to be consistently less than the inflation target; indeed, since the target was announced in January 2012, inflation has been consistently below target, implying that it is not a target in a true sense, but a ceiling.
In an update on "tapering" from St. Louis Fed president James Bullard says
"Forward guidance is a promise to keep the policy rate near zero at least until unemployment falls below 6.5 percent or inflation rises above 2.5 percent."which has me thinking about this graph:
But then it didn't. And I'm not sure FOMC got the message.