[A] new paper by John Williams at the San Francisco Fed, which is noteworthy because Williams is the highest-placed Fed official yet to suggest that maybe the inflation target should be higherThe possibility of the Fed raising its target price inflation rate comes as no surprise to EPJ Daily Alert readers. In May, I wrote:
The Fed will increase interest rates slowly, but nowhere near enough to battle the price inflation that is coming.
They will play these games of when to make the next rate hike and get away with it while inflation remains relatively subdued, but when the inflation is significantly over the 2% target, they will at first, as Fischer is starting to do, make excuses as to why the climbing inflation can be allowed to run a "little" hot.
The idea that the Fed is going to go to negative rates anytime soon is absurd.