Federal Reserve Chairman Ben Bernanke put the U.S. dollar squarely on the Fed’s radar screen, saying its slide against other currencies has led to an “unwelcome” rise in U.S. inflation and may be a factor in inflation expectations.
Mr. Bernanke also suggested that the Fed is unlikely to lower official interest rates further, though his remarks suggested that — barring a further rise in inflation expectations — the Fed probably won’t contemplate higher rates until there is more stabilization in home prices.
Source: The Wall Street Journal
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The inflationary reality that we as consumers have been living for months may finally be starting to dawn on the U.S. Federal Reserve.
It’s about time!
The minutes of the last policymaking Federal Open Market Committee (FOMC) meeting, released on Wednesday, showed that the Fed’s inflation forecast was raised from a range of 2.1%-2.4% to a range of 3.1%-3.4%.
Add the zooming oil prices we have seen recently into the mix, and the conclusion is inevitable: The nation’s central bank will soon have to reverse course and start raising interest rates - and probably in a hurry, too, if the Fed wants to keep oil prices on this side of the stratosphere.
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But what would happen to the U.S. housing market…
Can somebody tell me where the “U.S. housing market” is? I can’t seem to find it on the map. All real estate is local!
…whose struggles were the main reason why rates were slashed to begin with? After all, a little inflation is helpful; if wages follow prices, pretty soon everyone is earning more in money terms, house prices don’t look so high, and the market can recover.
Source: moneymorning.com
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