How patient will the FED be towards inflation?

The Federal Reserve is starting to become relatively impatient about the still stifled inflation. At its last meeting, the central bank warned that "there is a risk that will reduce inflation expectations and keep it below the expected levels of about 2%."

Some indicators of the nature of inflation remain low. Despite low unemployment, pressures on tariffs and the suspension of interest rates, inflation can not be revived.

However, the Fed will ask whether the current interest rate policy is too tight. Even at the moment, interest rates are low, maybe they will be too high for the Fed and reach the target of 2% inflation. However, a large number of investors believe that the Federal Reserve does not have many ways to raise inflation, given the weak global economic growth. The trade war is entering a new phase, which becomes quite fragile.

While there are still strong backwinds, it will be very difficult for the Fed with conventional methods and patience policy to raise inflation. This, in the end, may cause the central bank to decide to lower interest rates.

Source: The Financial Times

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