Fed Officials Tweak ‘Transitory’ Inflation Narrative, Vow Action If Price Pressures Stay Too High

The Epoch Times Header

New documents detailing closed-door discussions at the most recent Federal Reserve policy meeting show officials softening their “transitory” view of inflation, acknowledging the recent bout of higher prices as more intense and longer-lasting than they previously believed while vowing to act more aggressively if inflationary pressures stay elevated for too long.

Minutes of the Nov. 2–3 meeting of the Federal Open Market Committee (FOMC), released Nov. 24, indicate that members revised upwards their near-term outlook for inflation, blaming faster-than-expected consumer food and energy price rises, along with production bottlenecks, wage gains, and a tightening labor market.

They said they expected inflation to accelerate relative to September’s pace, anticipating that the 12-month change in the personal consumption expenditures (PCE) price index would go up and end the year “well above 2 percent,” which is the Fed’s target inflation rate.

Recent Commerce Department data has borne out this prediction. The headline PCE inflation measure rose at 5.0 percent in the 12 months through October, the fastest pace since 1990, while the core PCE index, which strips out the volatile categories of food and energy and is the Fed’s preferred gauge for calibrating policy, rose at 4.1 percent, the fastest pace since 1991. This represents an acceleration in inflation from readings in September, which showed PCE rising at 4.4 percent and core PCE at 3.7 percent.

While Fed officials judged that the elevated price pressure were mostly driven by production bottlenecks and other factors that they expect to be temporary in nature, they agreed that they should make the case for “transitory” inflation less forcefully.

Members “concurred that it would be appropriate to convey less certainty about the path of inflation by noting that the factors driving elevated inflation ‘are expected to be transitory,’” while noting that “inflation pressures could take longer to subside than they had previously assessed.”

Some members expressed the view that the factors driving up prices had spilled over from a narrow range of pandemic-related categories and had become more widespread, though they “generally continued to anticipate that the inflation rate would diminish significantly during 2022 as supply and demand imbalances abated.”

Still, Fed officials said their uncertainty regarding the inflationary assessment had increased.

By Tom Ozimek

Read Full Article on TheEpochTimes.com

The Epoch Times
The Epoch Timeshttps://www.theepochtimes.com/
Tired of biased news? The Epoch Times is truthful, factual news that other media outlets don't report. No spin. No agenda. Just honest journalism like it used to be.

Columns

Can Ramaphosa and Trump Come to Terms?

Whether South Africa can quell the hostility emanating from Washington, without compromising on its national priorities, is a formidable test for a country

Maddened Europe

Viable prospects for peaceful settlement of conflict between Moscow and Kyiv exist, but Europe obsesses over threat of incursion onto European territory.

BOMBSHELL: DOGE Proves Democrats Guilty of Election Fraud!

As the old expression goes, “That didn’t take long!” Over...

Tariffs Will Make America Rich Again

The US won World War II because we could outproduce our enemies, Peter Navarro explained, and the American “arsenal of democracy” permitted the Allies to triumph.

America’s sport export

The popularity of baseball in Japan and Korea contrasts to a shrinking American audience where the average age of your MLB fan is a 57-year-old Caucasian man. 

News

What to Expect From Trump’s Global Tariffs

Trump has dubbed April 2 “Liberation Day,” when he will unveil reciprocal tariffs to level the trading field between the United States and its 200 partners.

Voters Head to Polls in 3 Key Elections in Florida, Wisconsin: What to Watch For

On April 1, voters head to the polls for three races in Florida and Wisconsin, with substantial implications for the future beyond the current contests.

Trump Has Called April 2 ‘Liberation Day’—What’s Happening?

Trump is to unveil his admin’s reciprocal tariffs on U.S. trading partners, which features US matching tariff rates set by other countries on American goods.

Court Halts Trump Admin’s Move to Revoke Protected Status of Venezuelans

Federal judge in CA put a pause on the Trump admin’s plan to terminate TPS of 350,000 Venezuelan immigrants, whose legal status was set to expire on April 7.

Hegseth: Men and Women in Combat Must Meet ‘Same, High Standard’

Today at the Department of Defense all combat roles are open to men and women BUT they must all meet the same, high standard, Def. Sec. Hegseth said.

Supreme Court Seems Sympathetic to Catholic Charity in Religious Rights Dispute

The U.S. Supreme Court on March 31 seemed inclined to side with a Wisconsin Catholic charity that argues that it should not have to pay unemployment tax.
spot_img

Related Articles

Popular Categories

MAGA Business Central