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Inflation Above Expectations, Brainard Hints At Yield Curve Control
Consumer price inflation came in higher than expected in June. Headline prices rose 0.6% (expected 0.5%) on the back of a sharp 12.3% rise in gasoline prices but also a 0.6% gain in food costs. Still, even after excluding food and energy, core prices rose 0.2% (expected 0.1%). That said, one month does not make a trend. It is a challenge to expect strong inflationary pressures to emerge given the weak economic environment. The Fed should be free to maintain a very accommodative policy stance. Federal Reserve Governor Lael Brainard indicated the Fed is heading toward even easier policy and gave a strong signal that ... (full story)