Blog: Will the Fed Care if Inflation is Sticky?

This month's CPI didn't stop the market from charging ahead. Of course, Fed Chair, Jerome Powell, said that we were "getting close" to the point where they would reduce rates. But since the glide path to that 2% target seems pretty long, "getting close" can mean a lot of things. Does he mean inflation is close to the target? Or did he mean we are close to the time where they will start easing? Or both? If the former, then the asymptotic approach to the 2% target can be very long if the curve is fairly flat. If the latter, does it mean the Fed is capitulating before the target is reached? Is, maybe 3% inflation acceptable, as I mentioned over a year ago here?