Here’s the Fed’s current forecast for the economy:
The Fed is estimating that unemployment, now at a three-year low of 8.2 percent, will be between 7.8 percent and 8 percent at year’s end.
Its prediction for inflation is slightly higher but remains below its 2 percent target.
“Mr Chairman, you’ve indicated that current Fed policy is appropriate given the Fed’s dual mandate of 2% inflation and high employment (which you define as 5.2% to 6.0% unemployment.) Suppose Congress had instructed you to focus exclusively on achieving 2% inflation, and to ignore the plight of the unemployed. How would the Fed adjust its policy.”
Do you think Bernanke would give the correct answer? (Which is; “Not at all.”)