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Nick Timiraos: Conflict in Mideast Reignites Inflation Nightmare, Limiting Room for Future Rate Cuts
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Nick Timiraos, a reporter at The Wall Street Journal, wrote that, for the fifth consecutive year, the Fed believed that inflation was finally set to fall back to its 2% target, only to have its plans derailed by yet another unexpected turn of events. First came the lingering effects of the COVID-19 pandemic; then the Russia-Ukraine conflict; and last year, a sweeping tariff plan was rolled out. The US launched attacks on Iran beginning in late February, and the resulting turmoil in the Middle East disrupted the Strait of Hormuz, stalling the fight against inflation and potentially further delaying the achievement of the inflation target. Timiraos concluded that, following last year’s rate cuts, many officials believed that their current policies may have had little binding force on the economy to begin with. Unless the economy shows signs of substantial weakness, there is very little room left for further rate cuts. Moreover, the worsening inflation situation has left them even more constrained in utilizing their remaining room for rate cuts. AAStocks Financial News Website: www.aastocks.com |
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