Most disturbing in the Federal Reserve's release is this language, " to support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee agreed today to increase policy accommodation by purchasing additional agency mortgage-backed securities at a pace of $40 billion per month."
When did the Federal Reserve have a mandate to ensure inflation? They apparently decided on their own, in January of 2012. "The Committee judges that inflation at the rate of 2 percent, as measured by the annual change in the price index for personal consumption expenditures, is most consistent over the longer run with the Federal Reserve's statutory mandate." Article
This seems to be new territory. A subtle but real self altered mandate from the Fed. I object. Pegging rates at zero, and attempting to establish a 2% inflation rate, is like trying to steal 2% of every saved dollar. Additionally, this 2% most assuredly removes fuel and food costs. Looks like a planned robbery.
In 1977, the Federal Reserve dual mandate was, "The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy's long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices and moderate long-term interest rates." Article No mention of ensuring inflation here. In fact, just a few years earlier, Arthur Burns imposed wage and price controls with a 4% inflation rate.
When did the Federal Reserve have a mandate to ensure inflation? They apparently decided on their own, in January of 2012. "The Committee judges that inflation at the rate of 2 percent, as measured by the annual change in the price index for personal consumption expenditures, is most consistent over the longer run with the Federal Reserve's statutory mandate." Article
This seems to be new territory. A subtle but real self altered mandate from the Fed. I object. Pegging rates at zero, and attempting to establish a 2% inflation rate, is like trying to steal 2% of every saved dollar. Additionally, this 2% most assuredly removes fuel and food costs. Looks like a planned robbery.
In 1977, the Federal Reserve dual mandate was, "The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy's long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices and moderate long-term interest rates." Article No mention of ensuring inflation here. In fact, just a few years earlier, Arthur Burns imposed wage and price controls with a 4% inflation rate.
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