Federal Reserve Vice Chairman Stanley Fischer sits on Chair Janet Yellen’s left shoulder, muttering:
… we may well at present be seeing the first stirrings of an increase in the inflation rate …
Fed Governor Lael Brainard perches on the right, whispering:
… there are risks around this baseline forecast, the most prominent of which lie to the downside.
Yellen is caught in a tug of war between Fischer and Brainard. At stake is the Fed chair’s willingness to embrace a policy stance that accepts the risk that inflation will overshoot the U.S. central bank’s target. At the moment, Brainard has the upper hand in this battle. And she has a new weapon on her side: increasing concerns about the stability of inflation expectations.\
Continue reading on Bloomberg...
