Fed Insiders Push for Radical Policy Revamp

The video discusses the concept of inflation targeting, focusing on the common 2% target adopted by many central banks, including the Federal Reserve. It explains the rationale behind this target, such as providing a cushion against deflation. The video also addresses the challenges faced in achieving this target, particularly due to the falling neutral interest rate. It highlights the implications of these changes for future monetary policy, including the potential need for new strategies to address economic challenges.

What was the initial inflation target set by the Reserve Bank of New Zealand?

How did the inflation target of 2% provide a cushion against deflation?

In what ways has the Yellen Fed influenced the current economic landscape regarding interest rates?

What challenges does the Federal Reserve face regarding the neutral interest rate?

What implications does the paper presented by economists at the Federal Reserve Board have for future monetary policy?