Moscow. June 15. INTERFAX.RU – Chairman of the Board of governors of the Federal reserve system (fed) Janet Yellen for the first time publicly announced the possibility of raising inflation target in the United States from the current 2% per annum, speaking at a press conference after the June meeting of the Central Bank.
“We will reconsider it in the future,” she said.
According to her, the appropriate inflation targeting is “one of our most important decisions”, which may be taken only with the “wide spectrum of opinions and research that is currently conducted both at the fed and beyond”.
“Such a review should consider not only the potential benefits of raising the target level of inflation, but also the potential difficulties that can be associated with it,” – said Yellen.
Strap of 2% was adopted by the Fed over the rule in 2012 after very careful consideration, she said.
For the past five years, US inflation has been below the target level most of the time, with the exception of one month, writes The Wall Street Journal. Economists and heads of the Central Bank spoke in favor of raising the inflation target, taking into account that interest rates in the United States in the foreseeable future will remain low even with further tightening of monetary policy.
The review said the former head of the Federal reserve Ben Bernanke and Chairman of the Federal reserve Bank of San Francisco, and last week 22 famous economist signed a letter with a call to raise the inflation target. They rested on the fact that the ageing population, slowing productivity growth and other structural changes in the economy led to lower natural interest rate adjusted for inflation, which is necessary for the normal balance of borrowing and lending.
According to Yellen, the fed is ready to agree to a weakening of the regulatory burden for U.S. banks associated with the requirements for capital levels and a rigid demarcation of the investment operations of banks and consumer credit (the Volcker rule). In his speech the head of the fed has supported some of the published on Monday the recommendations of the Ministry of Finance of the United States on the deregulation of the financial sector.
Yellen declined to answer questions about whether she wants to remain fed Chairman for a second term, saying only that he was going to finish up to the end of the current term, ending in early February, 2018 and the future plans were not discussed with the US President Donald trump.
As reported, the fed following the meeting, 13-14 June decided to raise the target range of interest rates on Federal loan funds (federal funds rate) by 25 basis points to 1-1. 25% per annum. The heads of the fed is counting on another rate increase in 2017.
Also, the American Central Bank announced that it intends to start reducing assets on the balance sheet, which after the stimulus programs amounted to $4.5 trillion, this year. The fed unveiled a rough plan of normalization, but did not specify the date of its beginning. John.Yellen, razyasnyat approach of the Federal reserve for reduction of assets, also declined to name the exact date.