The legislation on banking crises has two potentially conflicting objectives: maintaining financial stability – which leads to interventions in support of troubled banks to avoid systemic repercussions – and preventing banks from behaving opportunistically in the expectation of public intervention.
In the September SEP, FOMC participants left their assessment of inflation unchanged with a central tendency for PCE inflation by the fourth quarter of 2014 to between 1.5 and 1.7 percent. The Philadelphia Fed’s most recent Survey of Professional Forecasters also increased its average estimate of headline PCE inflation to 1.8 percent in 2014, up from 1.6 percent in the last survey.