SF Fed's Yellen on enhancing Fed credibility

In the speech 'Enhancing Fed credibility' given on 13 March Janet Yellen of the Federal Reserve Bank of San Francisco said the Federal Reserve's credibility would be enhanced if the central bank would establish a specific numerical inflation target.

Yellen said she favours an inflation target of a 1.5% as measured by core personal consumptions expenditures price (PCE) index.

There could be a "comfort zone" extending between 1 and 2% around the target, Yellen said.

A numerical target that is

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