Global Macro Service > Research Briefings > United States

Inflation shows its soft side to the Fed

Observed via the inflation lens, the strong “Powell put” is likely to remain in place through most of 2019. While core inflation is gradually converging toward the Fed’s 2% objective, a bottom-up analysis of recent inflation developments along with a decomposition of procyclical and acyclical trends shows no reason to fear a significant inflation overshoot. Firmly anchored expectations and moderate pricing power should put inflationistas’ worries to rest.

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