U.S. officials keep moving the goal posts.
The evolution has been fascinating. Inflation went from not happening to being hot for longer real quick.
Fed Chair Jerome Powell told the Senate Banking Committee in prepared remarks that inflation pressures are likely to last longer than expected.
“Inflation is elevated and will likely remain so in coming months before moderating,” Powell said. “As the economy continues to reopen and spending rebounds, we are seeing upward pressure on prices, particularly due to supply bottlenecks in some sectors. These effects have been larger and longer lasting than anticipated, but they will abate, and as they do, inflation is expected to drop back toward our longer-run 2 percent goal.”
Of course, he is blaming this on supply issues and not the U.S. central bank’s enormous monetary expansion.
He promised that the institution “will do all we can to support the economy for as long as it takes to complete the recovery.”
Whether this includes tapering the taper talk or not remains to be seen.
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