Bulletin: Understanding the Inflation Puzzle
April 2, 2015
In this piece, Portfolio Manager Brian Meaney reviews the current inflation picture in the US and how it relates to the economy and a possible Federal Reserve rate hike.
- The US economy has seen positive growth and falling unemployment, but inflation has been quite low.
- Easy monetary policy and falling unemployment have not caused sustained inflationary pressure. As history shows, this is not a new phenomenon.
- Structural changes and global economic forces play some role in persistently low US inflation.
- The conflicting data on jobs and inflation means the Federal Reserve must be pragmatic about raising rates, which they expect to begin later this year.