Federal Reserve: Inflation Is Expected To Continue To Fall In The Near Future

The Fed said the US economic activity continued to expand steadily.

In the January statement, the Fed's description of the US economy was more optimistic than that of December. In December, the Fed said the US economic activity was moderately expanding.

The Fed also pointed out that the labor market has further improved, the number of new jobs has been strong, and the unemployment rate has continued to decline.

The wording of the FOMC statement shows that the Federal Reserve is confident of economic growth and employment.

However,

Short term inflation is expected to slide further, further away from the Fed's long-term goal, mainly due to the decline in energy prices.

The Fed also pointed out that, based on the market in recent months

The longer term inflation expectations remain stable based on the sharp decline.

At present, inflation in the United States has been lower than the target level of 2% of the Federal Reserve for 31 consecutive months.

The Federal Reserve's position in the statement is not conspicuous.

When deciding, global economic changes will be observed.

Federal Reserve officials have been trying to avoid pointing out pressure from overseas, such as the slowdown in China and Europe, the turbulent financial markets in Greece, etc.

The weakness of overseas economy and the appreciation pressure of the US dollar have a negative effect on US inflation.

Jon Hilsenrath, a Wall Street Journal reporter, said the January FOMC statement implied that the Fed would not raise interest rates before June, which means that the Federal Reserve will debate fiercely about the timing of interest rates hike in the coming months.

According to Hilsenrath, Yellen said in a December press conference that patience means that the next two FOMC meetings will not raise interest rates, which concludes that the Fed will not raise interest rates in March and April.

Hilsenrath expects the Federal Reserve to face more difficult times at the March meeting, when it is necessary to decide whether to cancel the wording of patience in the statement.

Hilsenrath points out that the Federal Reserve is cautious about inflation, but it has yet to be vigilant.

The Federal Reserve values the expectations of residents, businesses and investors for future inflation, hoping that these expectations will remain stable.

Many officials pay more attention to inflation expectations based on surveys, such as inflation expectations in University of Michigan's survey report.

According to the Fed, inflation expectations based on surveys are more stable.

Summary of FOMC statement January:

The committee agreed that there should be "patience" in raising interest rates.

The US Federal Reserve keeps interest rates unchanged, which is in line with expectations.

The US economy is expanding steadily and steadily.

The labour market has further improved, the number of new jobs has been strong, and the unemployment rate has continued to decline.

The Fed expects short-term inflation to slide further.

The Commission will assess the development of the financial sector and the international market.

All the members voted in favour.