Fed's Bullard defends inflation target

The Federal Reserve was neither "hawkish" nor "dovish" when it set a formal inflation target, and such a move would make sense even if the U.S. central bank had a single mandate, a ...

The Federal Reserve made a splash last week with the release of the FOMC minutes from the central bank's mid-December monetary policy meeting.

BofA Merrill Lynch economist Ethan Harris has been banging the table about the risks that disinflation (falling, but positive inflation) pose to Federal Reserve monetary policy for a while now. As the chart below shows, several measures of inflation are trending lower on a year-over-year basis. With each new data release, it seems like the amount of annual inflation in the United States economy is moving further and further away from the FOMC's 2% target.