Two Fed presidents support inflation targeting

FYI from Reuters:

RICHMOND, Va. (Reuters) - A long-simmering debate over whether the Federal Reserve should adopt a formal goal for U.S. inflation moved to front burner on Tuesday when two policy-makers backed the idea in separate speeches.

At the Fed's rate-setting meeting in February, the policy committee opened discussions about inflation targeting -- an idea Chairman Alan Greenspan opposes -- but further talks were put off amid divergent views.

Richmond Fed Bank President Jeffrey Lacker said in a speech at the University of Richmond an inflation target would help keep concerns about rising prices in check and boost transparency at the central bank.

"Ambiguity about the Fed's long-run inflation intentions has outlived its usefulness," he said. "I believe that the adoption and announcement of an explicit, numerical, long-run inflation target by the Fed would enhance the effectiveness of monetary policy."

and...

Philadelphia Fed Bank President Anthony Santomero also backed an inflation goal in a speech in Berlin, calling it a "reasonable next step in the evolution of U.S. monetary policy."

Read the full article here.

Refer also to one of my previous posts on the release of the minutes from the last FOMC meeting.