Fed Forecasts Show Transitory Inflation, Lower Growth in ‘11

Federal Reserve officials forecast that a measure of prices will rise between 2.1 percent and 2.8 percent this year before moderating, underscoring their view that inflation pressures will be “transitory.”

The forecast range for this year compares with the 1.3 percent to 1.7 percent rate estimated in January. The Fed’s preferred gauge of inflation, the personal consumption expenditures price index minus food and energy, will rise a more modest 1.3 percent to 1.6 percent this year, up from January’s estimates of 1.0 percent to 1.3 percent and still within the Fed’s preferred range of 2 percent or a bit lower.