With the economy recovering, the Fed should consider implementing an explicit numerical objective for inflation, Federal Reserve Bank of Philadelphia president and chief executive officer Charles Plosser said Thursday.
“I believe adopting an explicit numerical inflation objective will enhance the ability of monetary policy to achieve the Federal Reserve’s statutory mandates of price stability, moderate long-term interest rates, and maximum employment,” Plosser said, according to a prepared text of his remarks released by the Fed.
“The apparent strengthening of the U.S. economy suggests that, in the not-too-distant future, monetary policy will have to begin reversing course from a very accommodative policy stance,” he said.
“As we choreograph that exit, I believe that the Fed should do all it can to underscore its commitment to maintaining price stability.”
