The Federal Reserve needs to continue gradual rate hikes despite broad uncertainty about the path of inflation, Fed Chair Janet Yellen said on Tuesday in remarks that acknowledged the central bank's struggles to forecast one of its key policy objectives. It is possible, Yellen said, that the Fed may have "misspecified" its models for inflation, and "misjudged" key facts like the underlying strength of the labor market and whether inflation expectations are as stable as they seem. While there is not enough evidence of a major shift in inflation dynamics for ...
Gradual hikes should continue, despite weak inflation: Fed's Yellen
Recent low inflation "likely reflects factors whose influence should fade over time," Yellen added