Fed should be soft on inflation - BNPP
|In view of the analysts at BNP Paribas, it is completely reasonable for the Fed to be soft on inflation as a low level of equilibrium interest rates still haunts the US economy, and it would be irresponsible for the Fed to ignore this.
Key Quotes
“At best, this low-rate “regime” would prove to be temporary, and rates of productivity and trend growth would recover, allowing a higher level of interest rates to be sustained. The Fed cannot set policy based on a wish of what might happen in the future. One could argue it has already made this mistake once during this recovery (by assuming equilibrium rates were too high) and cannot afford to make it again.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.