Inflation Data Weakens the Fed's Case for Another Hike
- Yellen holding out for labor market to spur wages, prices
- Officials in show-me camp want evidence before another hike
Kroszner Says Fed Tightening Will Be Gradual, Gentle
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Federal Reserve plans for gradual interest-rate increases hinge on inflation rising to its 2 percent target, but it’s not showing up and they don’t know why. That’s undermining Chair Janet Yellen’s case for further policy tightening.
Over two days of congressional testimony this week, Yellen stuck to the Fed’s outlook for gradually rising inflation that would support additional hikes in their policy rate. That was before Friday’s consumer price index report that showed continued weak pricing power in June across a range of goods and services for the fourth consecutive month.