Bessent signals openness to revisiting Fed's 2% inflation goal

 U.S. Treasury Secretary Scott Bessent has said that the Federal Reserve could revisit its 2% inflation target after consumer price growth is firmly under control, warning that moving too soon could hurt credibility.

“Once we are back to 2 — which I think will be in sight — then we can have a discussion: Is it much smarter to have a range?” Bessent said in an interview on the All-In Podcast, as quoted by Bloomberg. “Once we re-anchor to the target, then we can talk about a range.”

The Treasury chief suggested that the future inflation-targeting ranges could be 1.5%-2.5% or 1%-3%. 

The notion of “decimal-point certainty is just absurd,” Bessent said in the interview, which was posted on Dec. 22 and recorded after the Dec. 18 release of the November CPI report. Still, he warned that changing the objective while price growth remains elevated could signal a willingness to move up the goalposts whenever inflation runs too hot, a risk to the Fed's credibility.

Bessent acknowledged that consumer price levels remain elevated, although he emphasized inflation is starting to ease, helped in part by falling rents.

https://www.msn.com/en-us/money/markets/bessent-signals-openness-to-revisiting-fed-s-2-goal/ar-AA1SVl7w