The “best guess” for how inflation ends is that the United States first endures a period of “stagflation” – a stagnant economy combined with persistent and widespread rising prices of goods and services – that could last up to a decade, a high-ranking Federal Reserve Bank of St. Louis official said Monday night., assistant vice president and lead economist in the St. Louis Fed’s Division of Supervision, Credit and Learning.
“If this is the way you get back to that 2% inflation, this could happen fairly quickly. This could happen within one to two years,” said Emmons. He added that Nobel Prize-winning economist“It could happen if the central bank – the Fed – has enough credibility with the public – businesses, households – to essentially get everybody to focus on the same goal; if we want to get back to 2% inflation, maybe it involves some sacrifice in the short run.
Proponents: the White House, Fed leaders, economic forecasters, the nonpartisan Congressional Budget office, financial markets until recently and the public generally. “Inflation might not fall on a straight line, but maybe it bounces around and is erratic. But maybe it ends up at 2% or so somewhere in the next two, three, four years because it’s more likely this scenario would be part of a hard landing,” Emmons said.
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