Central Bankers Liking It Hot Doesn’t Mean Mandate Rethink
- Yellen says ‘high-pressure’ economy may heal recession scars
- No broad ‘regime change’ expected for inflation targets
Hot on Economy, Cold on Mandate?
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Listen to U.S. Federal Reserve Chair Janet Yellen or Bank of England Governor Mark Carney these days and you might conclude central bankers are rethinking their inflation targets. Not quite.
Take Yellen. Having mused on Friday that a “high-pressure economy” might help heal the harm done by the recession, bond yields rose as investors bet that rising inflation may be less important to the Fed than boosting the labor market.