Tuesday, November 20, 2012

On inflation...

...as I have said multiple times on this blog, without wage pressure, the Fed will interpret commodity price increases as ephemeral and will continue with QE and other operations.

From a recent speech by Fed Chair Bernanke:

Because ongoing slack in labor and product markets should continue to restrain wage and price increases, and with the public's inflation expectations continuing to be well anchored, inflation over the next few years is likely to remain close to or a little below the Committee's objective.

...substantial slack remains in the labor market.

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