Editor's Note: Below is a brief excerpt from today's Early Look written by Director of Research Daryl Jones. Click here to learn more about the Early Look.
The key debate is now around inflation; or lack thereof. Inflation, you see, is transitory when it fits the narrative of the policy makers and non-transitory when it doesn’t. In a speech late last month, Fed Chair Yellen noted:
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“The Fed’s framework for understanding inflation dynamics could be mis-specified in some fundamental way." |
In the same speech she also reiterated that she and her colleagues believe this year’s low inflation is probably temporary. Yesterday’s Fed Minutes highlighted a similar confusion / debate. According to the Fed Minutes:
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“Many participants expressed concerns that the low inflation readings this year might reflect not only transitory factors, but also the influence of developments that could prove more persistent.” |
