The Chairman Speaks

Thursday, November 15, 2007

"Diversity of views . . . serves to limit the risk that a single viewpoint or analytical framework might become unduly dominant."

That's why all 19 Fed policymakers release their forecast for the economy, along with a narrative every quarter summarizing their consensus view about the outlook.

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"Ultimately, households and businesses care about the overall, or 'headline' rate of inflation. . . ."

So the Fed uses the overall rate when evaluating its objectives; in contrast, Alan Greenspan emphasized "core" inflation, which does not include food and energy costs.

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"As you may know, I have been an advocate of . . . an explicit numerical target or target range for inflation. . . ."

Bernanke did not set such a target, but some analysts said that by releasing more information, the Fed leaders are in effect indicating implicit targets.

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