Philadelphia Fed chief seeks 2% inflation target

11/9/2011

PHILADELPHIA — Charles Plosser, president of the Federal Reserve Bank of Philadelphia, said Tuesday the central bank should adopt a 2 percent long-term inflation target to increase policy makers’ accountability and improve economic stability.

“Being explicit about our inflation objective would help anchor expectations and reduce uncertainty about future policy steps,” he said.

Policy makers last week restated their commitment to keep the target federal funds rate near zero through at least mid-2013 as long as unemployment remains high and the inflation outlook remains “subdued.”