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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.

Wishy Washy Fed Policy Breeds Confusion - HEADLINE CPI 10 12 17

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:

“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:

“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.”

Wishy Washy Fed Policy Breeds Confusion - early look