Fed faces a ‘major challenge’ in making its new inflation strategy official


The Marriner S. Eccles Federal Reserve building stands in Washington, D.C., U.S., on Tuesday, Aug. 18, 2020.

Erin Scott | Bloomberg via Getty Images

The U.S. central bank will be faced with a delicate balancing act if it opts to embrace a more relaxed view on inflation, according to a former governor of the Federal Reserve.

It comes as market participants look ahead to the Fed’s latest meeting minutes, amid intensifying speculation the central bank could soon make an official commitment to ramp up inflation.

A move to adopt an average inflation target would see the Fed aim to push inflation above the usual target of 2% for some time to make up for the years of it being below these levels….


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