The Fed may soon let inflation run a little hotter than usual, Goldman says

The Fed has begun a monthslong review of its policy framework to consider alternative approaches to targeting inflation, and Goldman Sachs believes the central bank will decide to allow overshoots of its inflation goal next year. "If implemented ... this change would decrease the likelihood of further near-term policy tightening and lead to a small and gradual increase in both expected and realized price inflation," says Goldman's equity strategist Ben Snider. Since 2012, the Fed has always been attempting to hit a 2 percent target, but inflation has fallen short through much of the recovery.