Fed Statement Omits Previous Supply-Shock Explanation of Inflation
Dow Jones
3 hours ago
1404 ET - In its July policy statement, the Fed wrote that elevated inflation was "in part reflecting supply shocks that have driven price increases in certain sectors, including energy." A Fed confident that inflation was driven entirely by supply shocks can justify watching and waiting for price increases to cool. But the Fed's September statement omits that language, saying only that "inflation remains elevated." The language change helps explain one possible rationale for today's hike: a sense that inflation's underlying causes might be broader than previously assumed.
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