Is the Fed Looking at the Wrong Inflation Target?
Federal Reserve officials are warning investors not to rule out an interest-rate increase as soon as the central bank’s next meeting in November. The bond market’s response? We’re not buying it. In the past week, regional Fed presidents including Dennis Lockhart, Loretta Mester and Patrick Harker have said the U.S. economy is ripe for a hike and called the Nov. 2 meeting live for a rate decision. Richmond Fed President Jeffrey Lacker, who dissented twice last year in favor of raising rates, urged the central bank to hike to head off inflation in a speech Tuesday in Charleston, West Virginia. The policy rate should be at least 1.5 percent by now, he said. Robert Feldman, chief economist at Morgan Stanley Mufg Securities in Tokyo discusses with "On the Move" hosts Guy Johnson in London and Caroline Hyde in Frankfurt.