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Inflation Will Accelerate This Decade, Business Economists Say
Aug. 31 (Bloomberg) -- The Federal Reserve will be unable to prevent the trillions of dollars in government stimulus pumped into the U.S. economy from stoking inflation later this decade, a survey of business economists showed.
The price gauge tracked by the central bank will rise 3 percent a year on average from 2014 through 2018, according to the median estimate in a poll taken by the National Association for Business Economics. The rate exceeds the 2 percent pace that the respondents said was the Fed’s unofficial target.
The report is in line with surveys of consumers and indicates the central bank may have to work harder to damp inflation expectations after pouring more than $1 trillion into credit markets in a strategy known as quantitative easing. Economists in the survey also said the Obama administration’s $787 billion stimulus program would push consumer prices higher.
“An excessively stimulative fiscal policy and a complicated exit from its quantitative easing policies over the medium term will result in the Fed tolerating a higher level of inflation than it desires,” according to a statement issued by the Washington-based group today.
The price measure that tracks consumer spending and excludes food and fuel costs, the Fed’s favorite, rose 1.4 percent in July from the same month last year, the smallest gain since 2003, a Commerce Department report showed last week. The last time it exceeded 3 percent was in 1992.
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http://www.bloomberg.com/apps/news?p...d=a6BvsAteUyRc
Aug. 31 (Bloomberg) -- The Federal Reserve will be unable to prevent the trillions of dollars in government stimulus pumped into the U.S. economy from stoking inflation later this decade, a survey of business economists showed.
The price gauge tracked by the central bank will rise 3 percent a year on average from 2014 through 2018, according to the median estimate in a poll taken by the National Association for Business Economics. The rate exceeds the 2 percent pace that the respondents said was the Fed’s unofficial target.
The report is in line with surveys of consumers and indicates the central bank may have to work harder to damp inflation expectations after pouring more than $1 trillion into credit markets in a strategy known as quantitative easing. Economists in the survey also said the Obama administration’s $787 billion stimulus program would push consumer prices higher.
“An excessively stimulative fiscal policy and a complicated exit from its quantitative easing policies over the medium term will result in the Fed tolerating a higher level of inflation than it desires,” according to a statement issued by the Washington-based group today.
The price measure that tracks consumer spending and excludes food and fuel costs, the Fed’s favorite, rose 1.4 percent in July from the same month last year, the smallest gain since 2003, a Commerce Department report showed last week. The last time it exceeded 3 percent was in 1992.
...
http://www.bloomberg.com/apps/news?p...d=a6BvsAteUyRc
Wher are the deflationists?