As the Federal Reserve considers another interest rate hike in June, neither its economic objectives nor its decision-making criteria are clear. As a result, the Fed is increasingly at risk of losing credibility.
BERKELEY – The US Federal Reserve is increasingly at risk of losing credibility – and for good reason. As Narayana Kocherlakota, former President of the Federal Reserve Bank of Minneapolis, recently argued, Fed officials seem be balancing their stated aim of keeping inflation near 2% over the long term with a host of other, inexplicit, considerations.
BERKELEY – The US Federal Reserve is increasingly at risk of losing credibility – and for good reason. As Narayana Kocherlakota, former President of the Federal Reserve Bank of Minneapolis, recently argued, Fed officials seem be balancing their stated aim of keeping inflation near 2% over the long term with a host of other, inexplicit, considerations.