Dollar Now “Downside Surprise”

"We’re in a period where core inflation is starting to surprise to the downside,” said Gapen, a former Fed economist. For now, he projects the central bank will raise the benchmark interest rate in June, although “a continual downside shock from import prices” could make officials more patient, he said. Blackberry Display Picture, Find Here!
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Dollar Now “Downside Surprise”

 Oleh : InoaGroup.com

The currency’s influence on prices has become part of the debate. Fed Chair Janet Yellen, in testimony to the Senate Banking Committee last month, acknowledged that the drop in oil and rising dollar are causing inflation to fall short of the central bank’s objective.

The recent slowdown in prices excluding food and fuel is “in part reflecting declines in the prices of many imported items and perhaps also some pass-through of lower energy costs,” she said. The lack of inflation around the time some people forecast the Fed will raise the benchmark rate could forestall action by the central bank, said Thomas Costerg, an economist at Standard Chartered Bank in New York.

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