June 19, 2021
Economy

How will the Federal Reserve respond to surging US inflation?

How will the Federal Reserve respond to surging US inflation?

The Fed is under renewed pressure to tighten its ultra-loose monetary policy after data last week showed US consumer prices rose at their fastest pace since 2008 in the 12 months to April, exceeding economists’ expectations.

The inflation jump came ahead of the release of minutes of the central bank’s most recent meeting, out on Wednesday, that will give investors greater detail on the Fed’s plans to guide the nation’s economic recovery from the pandemic.

Chair Jay Powell reiterated after the policymakers’ meeting in late April that the Fed was still “a long way” from withdrawing any monetary support. Moreover, he and other committee members have made it clear they would allow inflation to temporarily run above the central bank’s long-term target of 2 per cent.

“They’ve been pretty…

Read full article…