Slowing U.S. Inflation Doesn’t Require Fed Response

Federal Reserve Bank of Philadelphia President Charles Plosser said a slowing in U.S. inflation to the lowest rate in more than three years doesn’t warrant a Fed policy response.

“Should inflation expectations begin to fall, we might need to take action to defend our inflation goal, but at this point, I do not see inflation or deflation as a serious threat in the near term,” Plosser said today in a speech in Stockholm.

Central bank officials including St. Louis Fed President James Bullard said last month persistent disinflation may require the Fed to provide stimulus beyond $85 billion in monthly bond purchases. Consumer prices rose 1 percent in March from a year earlier, the lowest level since October 2009, according to the Fed’s preferred gauge of inflation.

Bloomberg

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.