Stop the pussyfooting, and raise rates

Inflation has risen a little in America. The latest numbers show that the core consumer price index (CPI) is currently rising at an annualised rate of 2.8%. Janet Yellen, the chair of the Federal Reserve, says this isn’t really worth talking about. It is, she says, not real inflation. It is just a matter of the data being a bit “noisy”, thanks, it seems, to one-off rises in hotel-room costs and airfares. The analysts at Capital Economics don’t buy this. It “seems odd”, they say, to characterise the rise in core inflation as being noisy when it is “being [...]

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