Governing: To signal its intent to let the economy run a wee bit "hot" after the recession's end, seeking to restore full employment, the Federal Reserve has announced that it will fiddle with its inflation targets. It now calculates its trigger points over long periods, so it won't hit the brakes prematurely at the first sign of inflation. Meanwhile, the Fed has also crammed interest rates down by sopping up trillions of recent years' new deficit-funding U.S. Treasury bonds, which monetary mavens expect to later cause future inflation, perhaps toward the end of this decade.
As a result, there's a new problem on the horizon for public pensions, one that will call for some thoughtful reassessments of the always fraught assumptions that underlie their funding structures.
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