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In the view of the analysts at the ING bank, “the Fed believes there is enough spare capacity in the economy to dampen price pressures.”

Key quotes

“Annual rates will start to rise quickly though in March-July as price  pressures in a depressed, locked down economy 12 months ago are compared with price levels  in a vibrant re-opening economy in 2021.”  

“We expect to see headline inflation move above 3.5% in 2Q which could lead to a change in language from the Fed at the June FOMC meeting  surrounding the prospects for a tapering of asset purchases.”  

“We also think inflation could be  stickier due to improved corporate pricing power in a supply-constrained economy.”

“This will not begin until March.”