(AURN News) – The Federal Reserve remains locked in an intense battle against stubbornly high inflation, with policymakers signaling the road ahead will be longer and bumpier than previously anticipated, according to minutes from their latest Federal Open Market Committee (FOMC) meeting released Wednesday.
“Domestic data releases over the intermeeting period pointed to inflation being more persistent than previously expected and to a generally resilient economy,” the minutes indicated. While overall inflation has eased over the past year, the minutes also reveal concerns that progress has stalled recently. Consumer prices, as measured by the personal consumption expenditures (PCE) index, “slowed significantly over the past year but had moved up slightly in recent months,” according to the minutes.
The FOMC also indicated in their meeting that inflation remained stubborn when it comes to both goods and services. “Participants observed that while inflation had eased over the past year, in recent months there had been a lack of further progress toward the Committee’s 2 percent objective. The recent monthly data had showed significant increases in components of both goods and services price inflation,” the minutes said.
Policymakers also voiced worries about inflation’s continued financial impacts, noting, “Participants generally commented that they remained highly attentive to inflation risks. They also remained concerned that elevated inflation continued to harm the purchasing power of households, especially those least able to meet the higher cost,” the notes said.
“Participants noted that they continued to expect that inflation would return to two percent over the medium term. However, recent data had not increased their confidence in progress toward two percent and, accordingly, had suggested that the disinflation process would likely take longer than previously thought.”
While the Fed has indicated some progress, we are now learning that inflation is a tougher foe than expected.
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