Yallen baffled by US moribund inflation

This article is more than 12 months old

Oct 30, 2017 06:00 am

WASHINGTON: The moribund inflation seen in the world's largest economy over the last year is a "mystery", a "surprise" and a "concern" all at once, in the words of US central bank chief Janet Yellen.

And the dilemma - why price pressures have not picked up despite nearly a decade's worth of falling unemployment and growth - will be squarely at the fore when Federal Reserve policymakers gather tomorrow for a two-day meeting in Washington.

If futures markets are to be believed, the Fed will take no action on benchmark interest rates at the meeting, leaving the target range unchanged at between one per cent and 1.25 per cent.

But it expects to adopt a rate hike in December, its third of the year, to ward off inflation that perpetually seems to be just around the corner. - AFP