Janet Yellen’s mantra is, “It’s transitory!”
That’s Yellen’s typical response to a long litany of data that shows the U.S. is in the grip of a powerful disinflationary trend that may lead to outright deflation — a central banker’s worst nightmare.
The Fed has a publicly announced 2% inflation goal, which they consider to be price stability. In fact, 2% inflation cuts the purchasing power of the dollar by 75% in the course of an average lifetime. The Fed would tell you to ignore that.
…The Fed has created $3.5 trillion of new money since 2008, yet there has been no appreciable amount of inflation for nine years.
PG View: Rickards believes that rate hike expectations will deteriorate in the months ahead and that Yellen will be reluctant to do another rate hike as her last act as Fed chair.