The Fed looks shaky on its most important reason for raising interest rates

BusinessInsider/Pedro Nicolaci da Costa/05-03-17

[I]nvestors may have been missing a rather dovish signal sent by the Fed, and one crucial to the future path of interest rates: A rather sheepish description of inflation.

…This is really important because the Fed views both core inflation and inflation expectations, especially market-based ones, as particularly good predictors of future inflation.

Yes, this is a Federal Reserve that appears bent on raising interest rates even if economic conditions, while treading water, are hardly booming in a way that might generate too much inflation.

But if either inflation or inflation expectations edge too much lower, expect the dovish chatter to begin returning from some of the Fed’s more influential quarters.

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