Wall Street Journal (01/26/12) Luca Di Leo; Jon Hilsenrath
U.S. Federal Reserve officials expect to keep short-term interest rates near zero for almost three more years and have signaled they could restart a bond-buying program in another effort to provide a spark for the economy. Fed chairman Ben Bernanke says central bank officials are a little more confident that inflation is settling down after climbing last year, potentially giving the Fed leeway to take more action to support the economy, though he has not committed to it.
The Fed also formally declared it wants inflation of 2% a year in the long run in hopes of assuring the public it will not allow inflation to either rise or fall too much. However, Bernanke suggests he might let inflation run slightly above that for a little while if it would help to lower the unemployment rate.