Fed's Waller (voter) says Fed policymakers have always been committed to 2% inflation and it is a credible pledge
- Risks have flipped around, the labour market seems stabilised, and inflation has been taking off, which changes how you think about policy.
- Asked about Warsh recommitting to inflation target, says he has never been anything but committed.
- If the Fed's reaction function is not well understood, policymakers need to talk about it.
- Fed will not keep rates down for the purpose of helping US Government finance its deficits.
- Would prefer the inflation target to be set as a range, but changing the target at this point would not be credible.
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