Comments from top Federal Reserve officials indicate the central bank will probably hold off on raising interest rates for a while, The Wall Street Journal reports.
Inflation has climbed to an annual rate of 2.1 percent. But Fed officials are apparently more concerned about tepid economic growth – 3.1 percent in the fourth quarter.
Central bank policy “continues to be appropriate, Fed vice chairwoman Janet Yellen said Monday. The recent surge in commodity prices is "unlikely to have persistent effects on consumer inflation or to derail the economic recovery," she argues.
|Janet Yellen (AP photo)
So that’s not "likely to warrant any substantial shift in the stance of monetary policy," Yellen said.
William Dudley, president of the Federal Reserve Bank of New York, echoed those views Monday, "We think that it's important not to overreact to a rise in headline inflation because the increase in commodity prices is probably going to be temporary rather than persistent," he says.
That doesn’t sound like a Fed ready to tighten. Many private-sector economists see it the same way.
"There are a number of forces that are restraining economic growth. That puts the Fed into a position where they're more likely to be cautious and careful going forward," Kevin Logan, chief U.S. economist for HSBC, tells The Huffington Post.
"After all, this is one grand experiment."
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