The Fed believes temporary factors are goosing the inflation rate
by Rex Nutting
The U.S. economy, by all indications, is near full employment, and, according to the inflation hawks, that means inflation rates should start rising again.
In fact, the hawks say, inflation is already bubbling, and, if Janet Yellen doesn’t cool things fast, inflation will be at a full boil. Very soon, the hawks say, the inflation rate will exceed 2%, which is the Federal Reserve’s target rate.
Inflation has been below 2% for four years, which is one reason the Fed is keeping money so easy. Most Fed officials don’t think inflation will get back to 2% on a sustainable basis for two more years.