Economics
Fed Is More Worried by Inflation Running Too Cold Than Too Hot
- Long miss on inflation target raises doubts on new strategy
- Fed officials worry that disinflationary forces still at work
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Federal Reserve officials are just as worried about an inflation rate that runs too cold as one that runs too hot.
While rising prices are in the spotlight now as the economy reopens and demand surges, the longer-run trends that have suppressed costs globally could re-emerge as the pandemic ends, some policy makers warn. That would make it harder to deliver on their new strategy of running inflation above their 2% target for a time in order to achieve that goal over the longer run.