We have been hearing a pretty consistent message from Federal Reserve officials which is that they are warming to the idea of an inflation or unemployment target. With the unemployment rate remaining at a “painfully high” level, the Fed is “focusing intently on supporting job growth” according to Bernanke. He then went on to say that the central bank has the latitude to set an inflation target, a notion that seems to be gaining support within the central bank by the day. Everyone agrees that the U.S. will not escape the turmoil in Europe and the volatility that it creates in the financial markets only adds further strain to the U.S. economy. At this point, there is an extremely good chance that the central bank will introduce an inflation and/or unemployment target in the coming month.
http://www.fx360.com/commentary/kathy/6501/usd-bernanke-preps-market-for-policy-change.aspx
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