- I’m more cautious about inflation given the lack of progress
- Concern growing about recent increase in inflation expectations
- Expectations surveys are imperfect but recent sharp rise means the Fed cannot let its guard down
- Uncertainty might also weigh on growth
- Focus should remain on inflation to protect the Fed’s credibility
- Preference is to keep shrinking balance sheet as much as possible
- May need to rethink the concept of core inflation given that once-volatile food prices now behave more like other goods
This article was written by Adam Button at www.forexlive.com.
