US inflation may not return to target for years - Investec

FXStreet (Barcelona) - The Investec Research Team comments on the Federal Bank of San Francisco’s report which stated that US central bank’s inflation target may prove to be more elusive than they think.

Key Quotes

“The report states the Fed may not see their 2% inflation goal reached until 'after the end of 2016'. The findings could cast doubt on current Fed projections for inflation to creep into the economy, due to tightening labour market conditions.”

“If the Fed were to adjust their inflation expectations lower, this would certainly risk a reversal in the heavy US Dollar buying of late, as investors would push back rate rise expectations as they have done with the UK this month.”