The Fed Thinks Inflation Will Move Back to a 2% Target
Along with stocks, commodities and oil prices collapsed. This pushed down consumer price inflation.
What does the Fed think of that? Are they willing to hold off on rate hikes when the rate of inflation is falling?
Here is what one Fed economist had to say—
“Inflation remains below the Federal Open Market Committee’s 2% long-run target. We may see some further weakness in overall inflation in the second half of the year due to lower oil prices and a stronger dollar. However, [the San Fran Fed] expects inflation to gradually move back to the target over the medium term as energy prices and the value of the dollar stabilize or reverse direction and as the slack in product and labor markets diminishes.”
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