Fed again considers inflation target to fight deflation

01/16/2009 | Reuters

Federal Reserve policymakers are talking about reviving proposals for some kind of inflation target, with a consensus building that the biggest danger ahead for the U.S. economy is the possibility of slipping into a deflationary spiral. Janet Yellen, president of the Federal Reserve Bank of San Francisco, said an inflation target is one way the Fed could make it clear that either deflation or inflation rates of less than 1% "would be undesirable, unwelcome, and we would fight it."

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