Tweet
Fed's Bullard says bank's credibility on line
The Federal Reserve's use of core inflation measures is harming its credibility, the new president of the St. Louis Fed wrote in an editorial released on Thursday.
James Bullard, who took over from William Poole in April, said focusing on inflation indices that exclude food and energy work well when those prices are rising at rates similar to those of other prices, "but that is not what is happening today.
"It is hurting Fed credibility to say that we are trying to keep inflation low and stable, but at the same time we are not counting some of the prices that are going up at the most rapid pace,"
James Bullard, who took over from William Poole in April, said focusing on inflation indices that exclude food and energy work well when those prices are rising at rates similar to those of other prices, "but that is not what is happening today.
"It is hurting Fed credibility to say that we are trying to keep inflation low and stable, but at the same time we are not counting some of the prices that are going up at the most rapid pace,"