Fed’s Musalem: Inflation risks are tilted to the upside
|
On Thursday, St. Louis Fed President Alberto Musalem warned that rising inflation expectations combined with the risk of stubborn stagflation could create a double challenge for the US economy.
Key Takeaways
Assurance inflation is returning to 2% target needed before further policy changes; patient approach appropriate.
His baseline is for inflation to return to 2%, but risks are skewed to the upside.
Inflation expectations have moved higher, would make Fed's job more difficult if sustained.
There are scenarios where progress on inflation stalls or inflation rises alongside a weakening labor market.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.