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Mar 30 2015

To Be Impatient, or Not to Be

In a move to a reassure the markets, Federal Reserve Chairman Janet Yellen recently said that “just because we removed the word ‘patient’ from the statement doesn’t mean we are going to be impatient.” This implied, of course, that the June rate hike many expected is likely to happen later in the year. It also highlighted the question of what could be holding back the Fed from raising rates in June.

On the face of it, measures of employment have improved enough to justify a rate hike. So it is more likely that the Fed is worried about inflation and its potential to move back up to the 2% target, particularly in the context of a rate hike. For this reason, ECRI’s latest analysis focuses on different metrics of inflation that reveal whether the Fed inflation concerns are warranted.

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ECRI Future Inflation Gauge Rises

Bond Buyer March 6, 2015

U.S. inflationary pressures were up slightly in February, as the U.S. future inflation gauge grew to 102.0. More