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Fed officials sound an alarm, worrying weak inflation may be the last



"The Federal Reserve can use this opportunity to convey that a mild excess of inflation is consistent with our goals and to adjust the policy to that statement," she said.

Herr. Trump's tariffs, which increased to 25 percent of $ 200 billion of Chinese goods last week and could be charged an additional $ 300 billion of imports, could lift consumer prices in the US. On Thursday, Walmart, one of the country's largest dealers, said that Mr. Trump's tariffs would increase consumer prices.

On Wednesday, John Williams, the president of the Federal Reserve Bank of New York and vice-president of the Federal Open Market Committee, also raised concerns about inflation, and in a speech in Zurich said that global monetary policy makers could find themselves in a bond if they can't pick up the prices. Price gains have been consistently weak in Japan and the EU, including advanced economies.

"Investors look at these low inflation readings not as deviations, but rather a new normal," Williams said. He argued that central banks should revolutionize their political approaches to dealing with a low-cost, low-cost reality. "Absent such changes, central banks will be seriously challenged to achieve stable economies and well-rooted inflation expectations."

Companies, consumers and investors in the US have all lowered their inflation outlook. Market-based expectations of expectations have fallen sharply, and two recent Fed surveys show that both households and professional forecasters see weaker inflation over the next few years.

Due to the shaky background, the Fed has engaged in an annual review of its own policy strategies. Mr. Powell has described this process which is likely to lead to development rather than revolution, while other officials have expressed more optimism that it can lead to significant changes in how the Fed approaches monetary policy.

Areas to be considered include how the Fed targets inflation. The Fed is now shooting for a 2 percent symmetrical inflation target, which means it's always trying to beat that rate. Instead, it could shoot for 2 percent on average, for example, which means that it would counteract low inflation today with higher inflation later.


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