“The Fed statement said officials believe the economy ‘is likely to continue to expand at a moderate pace over coming quarters, supported by solid growth in employment and incomes and a robust global economy.'”
and…(emphasis added)
“Readings on core inflation have improved modestly in recent months. However, a sustained moderation in inflation pressures has yet to be convincingly demonstrated. Moreover, the high level of resource utilization has the potential to sustain those pressures.
Although the downside risks to growth have increased somewhat, the Committee’s predominant policy concern remains the risk that inflation will fail to moderate as expected.”
Sounds like a lot political speak to say “we have no idea what to do.” Also sounds like wishful thinking on incomes, the gimick of core inflation, employment, and that only sub-prime mortgages are defaulting. It does sounds like they may consider raising rates despite the growing cry from the bulls to lower them.
