Atlanta Fed's Lockhart: Inflation Is Low So Long as People Believe It Is Low and Stay Unemployed
Oh I love when they tell the truth. Here's the short story: too many of you are out of a job and confused by how much money they've unleashed in the wild to send inflation racing like a teenage heartbeat at a makeout party.
A lovely little bit on the Dow Jones wire:
Lockhart noted that core inflation, a measure that strips out volatile food and energy prices, has firmed to a level that is in line with the Fed's mandate to maintain stable prices and achieve full employment.
"But my concern is that broad inflation worries--even if in reaction to what are probably temporary relative price movements--could shift and cut loose inflation expectations," Lockhart said.
Relatively low wage increases should help keep inflation in check. "I do not see widespread wage pressures developing any time soon in the current circumstances of upwards of 20 million people either out of work or working part-time for economic reasons," Lockhart said.
Remember, they can keep the actual money supply tight so long as banks aren't lending and broke people aren't asking for $20s at the ATM. Which means they kind of need you to stay broke while they pencil in that exit strategy they never came up with.