Fed's Brainard: In future recessions, could signal that rates at zero-level until inflation above target
Comments from Brainard
- Could better time rate hikes after future recessions by committing to keep rates at zero until inflation is above target
- Temporary price-level targeting approach could guard against premature liftoff, help keep inflation expectations anchored
- Pre-crisis normal is not a good guide in new normal
- Persistently low neutral rate has big implications
Brainard was responding to a Bernanke policy on price-level targeting and said her comments weren't intended to address the current stance.