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Why the Fed is changing interest-rate goals

Sabri Ben-Achour Nov 21, 2016
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Stanley Fischer testifies before the Banking, Housing, and Urban Affairs Committee on his nomination to be the Vice Chairman of the Board of Governors of the Federal Reserve System on March 13, 2014 on Capitol Hill in Washington, DC.  MANDEL NGAN/AFP/Getty Images

Why the Fed is changing interest-rate goals

Sabri Ben-Achour Nov 21, 2016
Stanley Fischer testifies before the Banking, Housing, and Urban Affairs Committee on his nomination to be the Vice Chairman of the Board of Governors of the Federal Reserve System on March 13, 2014 on Capitol Hill in Washington, DC.  MANDEL NGAN/AFP/Getty Images
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Fed Vice Chair Stanley Fischer is out with a speech today in which he says the economy has a new interest-rate equilibrium — the ideal interest rate that neither spurs or slows the economy and that target is worryingly low. A year ago, the Fed was talking about eventually ramping up to four percent or more. But it now looks like the Fed will aim for just 2.9 percent or so. Why is that? And why does it mean for the economy?   

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