Analysis: Inflation answers to determine timing of Fed's pullback

12/31/2009 | Reuters

Answers to questions regarding inflation will help determine when the Federal Reserve will withdraw from stimulus programs. The U.S. central bank has justified its pledge to keep interest rates close to zero by taking comfort in the expectation that inflation appears to be restrained. While that seems to be true on the surf, economists and others are growing concerned. "We have the most potentially inflationary policy I have ever observed in a developed country," said Alan Meltzer, a Fed historian.

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