Fed won't be able to contain inflation, economists say

08/31/2009 | Bloomberg

Because the government has pumped trillions of dollars in stimulus funds into the economy, the Federal Reserve will not be able to keep inflation in check in the next several years, economists said. While the central bank's unofficial inflation target is 2%, economists expect the price gauge tracked by the Fed to increase by an average of 3% annually from 2014 through 2018. "An excessively stimulative fiscal policy and a complicated exit from its quantitative-easing policies over the medium term will result in the Fed tolerating a higher level of inflation than it desires," according to the National Association for Business Economics.

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