Fed’s Christopher Waller from Rome, Italy, at a Bank of Italy conference on monetary policy transmission.
Fed policymakers have always been committed to 2% inflation
Calls 2% inflation a credible pledge.
Risks have flipped around with labor market stabilizing and inflation taking off, which changes how you think about policy.
Asked about new Fed Chair Warsh says he is recommitting to inflation target, says that he has never been anything but committed
If the Fed’s reaction function is not well understood, policymakers need to talk about it.
Waller’s comment that the Fed chair is recommitting to inflation suggests the old chair Powell was not committed to inflation. Perhaps more hawkish, but in line with the Fed’s decision and comments from Fed’s Warsh.