The U.S. Federal Reserve Board (Fed) decision-making meeting will be held next week, according to a letter revealed on Tuesday, Fed Chairman Ball believes that the United States will temporarily appear “slightly higher” inflation this year, but the Fed will strive to control, will not allow the inflation rate to significantly exceed 2%, and will not allow long-term exceed this level.
Florida Senator Rick Scott wrote to Ball on March 24 to express doubts about rising inflation and the bond purchase program, Ball replied to the letter on April 8, but the contents were not disclosed by Reuters until Tuesday. Ball said in the letter, due to the strengthening of the U.S. economy, supply chain tensions, price increases in some industries, this year will temporarily appear “slightly higher” inflation, but Fed will work to control inflation in a certain range.
Bauer said: “We will not allow the inflation rate to exceed 2% significantly, nor allow a long time more than 2%. But I want to emphasize that we are committed to achieving the dual goal of full employment and price stability.”
Reuters believes that these words delineate the Fed’s tolerance range in the face of rising prices. Most Fed officials expect that the U.S. economy will not be able to reach this goal in the next few years.
Bauer and said to Scott: “Our future policy actions will be based on substantial progress toward the target.” Echoing his statements in recent months, that is, will not take policy action based on forecasts alone. Most analysts today believe that the 2015 rate hike was a policy mistake by the Fed that put the brakes on economic growth unnecessarily.
Bauer said that if progress toward employment and inflation targets slowed, the Fed’s accommodative policy would stay a little longer. It is widely rumored that Scott, a Republican, intends to run for the White House throne in 2024 and has repeatedly asked Ball to pay attention to the threat of runaway inflation.
Fed officials are expected to stay put in next week’s meeting, not because the U.S. economy has turned strong and changed its position.
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