U.S. Federal officials stay focused on possible drop in inflation expectations

“Many Federal Reserve policy makers last month said they should be on the lookout for signs of a decline in expectations for inflation, minutes of their meeting show. “Many participants observed the committee should remain attentive to evidence of a possible downward shift in longer- term inflation expectations,” according to a record of the Oct. 28-29 Federal Open Market Committee meeting released today in Washington. “Some of them noted that if such an outcome occurred, it would be even more worrisome if growth faltered.” Fed Chair Janet Yellen and her colleagues last month focused on improvements in the labor market when they announced an end to their stimulative bond purchases. They also said that the risk of inflation remaining persistently below their goal had ebbed,” wrote Christopher Condon and Jeff Kearns for Bloomberg News and published in the National Post this Wednesday.

Condon and Kearns continued, “The minutes show the members “continued to expect inflation to move back to the committee’s 2% target over the medium term as resource slack diminished in an environment of well-anchored inflation expectations.”  Consumer prices as measured by the Fed’s preferred gauge have slowed to a gain of 1.4% in September from a year earlier and have remained below the target for 29 consecutive months.”   Read the full article here. | Raymond Matt, CFP, CLU, TEP, CHS  

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