[...] the question has arisen of whether the Fed and the ECB should recognize that 2 percent inflation in a global economy awash in cheap oil, available workers and money-saving technologies might be too ambitious and should lower their targets. The major central banks' historically low interest rates and mass bond purchases have failed to offset the pressures of lower energy prices and tepid consumer demand. The credibility of the Fed and ECB hinges in part on their ability to achieve that level of inflation. [...] as that target remains distant, central bankers must maintain the extraordinary interventions they began with the 2008 global financial meltdown. Mohamed El-Erian, chief economic adviser at Allianz and a former deputy director of the International Monetary Fund, says the dilemma stems from an overreliance on interest-rate policies to support a floundering Europe. "When the world economy is fragile, you end up restraining demand," says Stephen Oliner, a former Fed economist who is now a resident scholar at the American Enterprise Institute, a conservative think tank.
Central Banks Falling Short Of 2 Pct. Inflation Target
By JOSH BOAK, AP Economics Writer, San Antonio Express-News: Business
Sat, 09/05/2015 - 12:01am
BING NEWS:
- European Central Bank should cut in June to avoid falling behind inflation curve, policymaker says
The European Central Bank should cut interest rates in June to avoid falling behind the inflation curve, according to one ECB policymaker.
04/18/2024 - 1:46 am | View Link - IMF expects central banks to cut rates in second half of 2024 as inflation falls
Global central banks will begin cutting interest rates in the second half of the year as inflation declines, according to a new outlook from the IMF.
04/16/2024 - 2:00 am | View Link - Gold Hits New High as Central Banks Ramp Up Purchases
Gold closed at another record high Monday, driven by central bank purchases. But prices may run into roadblocks due to wavering interest rate-cut expectations. June futures on the New York ...
04/8/2024 - 10:00 am | View Link - Inflation Victory Is Proving Elusive, Challenging Central Banks and Markets
Inflation is proving stickier than expected in the U.S. and Europe, creating a headache for central bankers and sowing doubts on whether investors are too optimistic about the world economy.
03/31/2024 - 4:00 am | View Link - More
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