It was a year ago this month that the Federal Reserve launched its first attack against inflation that had been percolating in the U.S. economy for at least the previous year. That first strike, in retrospect, would seem timid: Just a quarter percentage point increase to tackle price surges which in just a few months would peak at their highest annual rate since late 1981. It wouldn’t be long before policymakers knew that initial step wouldn’t be enough. Subsequent months saw much larger hikes, enough to raise the Fed’s benchmark borrowing rate by 4.5 percentage points to its highest since 2007. So after a year of inflation fighting, how are things going? In short, OK, but not a whole lot more. The rate hikes appeared to have quelled some of the inflation surge that inspired the policy tightening. But the notion that the Fed was too late to get started lingers, and questions are increasing over how long it will take the central bank to get back to its 2% inflation standard.
Source: CNBC
