Cleveland Fed Bank President Loretta Mester said in a speech, Fed’s new strategy statement “is now more explicit about how we will go about achieving” the inflation goal. “The new language is a stronger statement than we have made in the past”, she added.
“We are now clear that after inflation has been running persistently below 2 percent, not only will we tolerate serendipitous shocks that move inflation above 2 percent, but that we will likely set policy with the intention to move inflation moderately above 2 percent for some time.”
Also, “the new statement language clarifies that in the absence of inflationary pressures or risks to financial stability, strong employment is not a concern and monetary policy will not react to it”.
