The Federal Reserve minutes show that policymakers are concerned about the lack of progress on inflation rates. They expressed worries over persistent low inflation, which can be indicative of an economy operating below its potential. The central bank has set a goal of 2% inflation, as a safeguard against deflation.

Deflation can lead to decreased economic output and a potential economic downturn. Low inflation can also make monetary policy less effective, limiting the central bank’s ability to stimulate the economy. This concern suggests that the Federal Reserve may be likely to continue, or even extend, its policies aimed at boosting inflation, such as keeping interest rates low for the foreseeable future.

At the same time, officials are aware that too high inflation can also be harmful, leading to erosion of purchasing power and potentially causing economic instability. Balancing these inflation concerns with the need for economic recovery and growth is a key challenge for the Fed in the current economic climate.

Online Investing Daily

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.

Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!