Fed Hits Inflation Goal Only to Find Expectations Spoiling Party
- Central bank’s preferred price gauge probably rose 2.2% in May
- Policy makers ‘deathly afraid’ of weak inflation expectations
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Inflation is poised to breach the Federal Reserve’s 2 percent inflation target. The trouble is, lagging price expectations could well pull it back down.
The central bank’s preferred measure of prices probably climbed 2.2 percent in the year to May following 2 percent gains in the previous two months, a government report is forecast to show Friday. While that would be the strongest three-month stretch since early 2012, Fed policy makers are far from ready to declare mission accomplished.