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(The Week Ahead)

Reconsidering the 2 Percent Inflation Target

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, New York Times
Reconsidering the 2 Percent Inflation Target

The Federal Reserve aims to keep inflation rising at an annual rate of 2 percent. That has been the lodestar of monetary policy in the United States for the past 40 years. But a growing chorus of voices inside and outside the Fed thinks it’s time for a change. Interest rates are expected to remain low for the foreseeable future, and the combination of low rates and low inflation leaves little room for the Fed to respond to future economic downturns. Experts have advanced a variety of alternatives, which can be sorted into two broad categories: Replace the 2 percent target permanently, or agree to replace it temporarily when the economy next needs the Fed’s help. On Monday, the Brookings Institution will hold a discussion on the alternatives that will include the former chairman of the Fed, Ben S. Bernanke, and the presidents of the Boston Fed and the San Francisco Fed, among other experts.

— BINYAMIN APPELBAUM

Economists Watch for Signs of Inflation Uptick

The U.S. economy is the strongest it has been in a decade, but inflation remains in check. That’s good for consumers, but it’s something of a mystery for Federal Reserve policymakers. On Friday, the Bureau of Labor Statistics will release data on consumer prices in December. Economists expect it to show that inflation remained low, but will be watching closely for any sign of a pickup, which could prompt the Fed to raise rates more quickly.

— BEN CASSELMAN

The Latest Innovations From Tech and Car Companies

At the International CES trade show this week in Las Vegas, thousands of tech and car companies will showcase some of their hottest new innovations: artificial intelligence, self-driving car systems, smart refrigerators, voice-controlled accessories, fifth-generation cellular connectivity and more.

— BRIAN X. CHEN

Looking to European Central Bank Minutes for Clues

The European Central Bank on Thursday will publish an account of its monetary policy meeting that was held in December. Analysts will read the minutes even more closely than usual to see if they confirm speculation that an increasingly strong faction on the central bank’s Governing Council is in favor of making the current round of monetary stimulus the last. The ECB said in the fall that it would cut its purchases of government and corporate bonds in half in January, but promised to keep buying debt at least through September. With the eurozone economy exceeding expectations, many economists think there will be no reason to continue the purchases after that.

— JACK EWING

Expect Some Pain With U.S. Bank Earnings

For big American banks, the pleasure of a lower corporate tax rate won’t come until after a brief jab of pain: Banks have been warning their investors about a rough fourth quarter as they adjust accounting procedures in response to the new Republican tax plan, which President Donald Trump signed into law late last month. The first quarterly earnings reports are due this week, with JPMorgan and Wells Fargo leading the pack. Wells Fargo has not said how the tax bill will affect its earnings. JPMorgan said last month that it could take a $2 billion hit.

— EMILY FLITTER

Strong Holiday Shopping Numbers Could Provide Relief

The Commerce Department is scheduled to release data on holiday sales Friday. Many early indications suggest it could have been a strong holiday shopping season, which might bring much-needed relief for retailers struggling to transform their e-commerce businesses.

— MICHAEL CORKERY

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