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The Fed Has a Tricky Inflation Issue to Navigate

  • In FOMC with little suspense, language on prices matters
  • No change in rates expected, with June likely to see hike
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The Fed must remain "steady" amid the bond market’s transition, M&G CEO Anne Richards says.Source: Bloomberg

Federal Reserve officials have a tricky problem to navigate at this week’s meeting: how to describe inflation that has just bounced back to their elusive 2 percent target.

The policy-setting Federal Open Market Committee is expected to leave interest rates unchanged at its two-day meeting in Washington. How it opts to describe price pressures will shape expectations for the pace of future rate increases. A policy statement is scheduled for 2 p.m. on Wednesday.