Dudas also sees
upside inflation risks pointing to a bullish backdrop.
Not exact matches
Though all measures of
inflation were coming down as summer turned to fall and the economy clearly was slowing following a July brush with $ 4 - a-gallon gasoline, the FOMC decided to hold the fed funds rate at 2 %, concluding that «the downside
risks to growth and the
upside risks to
inflation are both of significant concern to the committee.»
As it turned out, the
upside risks to
inflation didn't materialize.
Fixed income investors have essentially given up on
inflation ever coming back since little
upside risk of that happening is currently priced into interest rate markets.
Coupled with the falling dollar, which raises the cost of imports, those trends could elevate
inflation for several years and, he said: «The
upside risk to
inflation is something markets should be paying more attention to.»
These
risks include the downside ones of a Chinese yuan devaluation and a U.K. exit from the European Union, as well as the
upside risks of an emerging market rebound or a moderate rise in
inflation expectations on improving growth prospects.
The Bank's current assessment is that
inflation (excluding tax effects) is likely to be in the upper part of the target zone over the next four to six quarters, though
inflation risks overall are tilted somewhat to the
upside.
The downside
risks to growth and the
upside risks to
inflation are both of significant concern to the Committee.
Given the momentum of the global economy, and with interest rates in many countries still not far from their historic lows, we think the
risks for both
inflation and interest rates look tilted to the
upside.
While the central forecast for underlying
inflation remains similar to that provided in February, the
risks around this outlook now appear more evenly balanced, rather than on the
upside as indicated in previous Statements.
As had been set out in the February Statement, consumer price
inflation was forecast to increase gradually to the top of the target band, with the
risks to that forecast judged to be weighted to the
upside.
While there are
risks in both directions around the
inflation forecast, the short - term
risks appear weighted to the downside, while longer - term
risks are more prominent on the
upside.
The Board's assessment of this information at its May meeting was that
inflation remained likely to increase gradually from its current level of around 2 1/2 per cent, but that
upside risks to this forecast had receded, partly as a result of the March tightening.
With the global uncertainties in economic growth,
inflation and monetary policy remain; portfolio diversification seems to be the key in 2015, which allows
upside participation while minimizes the downside
risk of over-concentration.
Furthermore, with financial stimulus applied this late in the cycle, and the resulting widening of the U.S. fiscal deficit,
inflation risks are skewed to the
upside.
The downside
risks to growth and the
upside risks to
inflation are both of significant concern to the Committee.
Although downside
risks to growth remain, the y appear to have diminished somewhat, and the
upside risks to
inflation are also of significant concern to the Committee.
, however, were more worried about
upside risks to
inflation arising from a labor market that had already reached full employment and was projected to tighten further.»
«Some other participants, however, were more worried about
upside risks to
inflation arising from a labor market that had already reached full employment and was projected to tighten further.»
We believe the Fed will tighten policy quicker than market expectations, given the
upside growth and
inflation risks from fiscal stimulus.