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Fed's Plosser says mild deflation not such a bad thing
November 14, 2013 / 3:05 PM / 4 years ago

Fed's Plosser says mild deflation not such a bad thing

WASHINGTON, Nov 14 (Reuters) - Mild deflation is not necessarily such a bad thing, a senior U.S. Federal Reserve policymaker said on Thursday, adding he would have preferred a Fed inflation target lower than 2 percent.

Charles Plosser, president of the Philadelphia Fed, said he was “not nearly as afraid of zero inflation or mild deflation” as some of his colleagues but still saw value in having a formal inflation goal.

“The value of the target is the commitment rather than the number,” he said in response to a question about deflation during a question-and-answer session.

Plosser, who called for a single inflation mandate for the U.S. central bank and said the Fed should remove all mortgage-backed bonds from its balance sheet, also said that the original purchase price paid for such securities should be the starting point in working out what price to sell them for.

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