Janet Yellen herself admitted in the Q&A that if inflation got above 2 percent, if it happened with a weak economy or high unemployment that the Federal Reserve would be willing to tolerate higher inflation in order to stimulate the economy. I have always maintained that, in fact I believe that when the official inflation numbers are north of 2 percent, when of course unofficially inflation is already running hotter than that number, but when the numbers finally get there, I expect the Federal Reserve to make all sorts of excuses. They will blame it on the weather, they will blame it on speculators, they will say its transient, they will say its OK, they will say inflation was so low for so long, it`s OK if its higher now because its all going to average out. There`s no way the Federal Reserve is going to raise interest rates because of higher inflation until its really catastrophic.
Peter Schiff is an American businessman, investment broker and financial commentator. Schiff is the CEO and chief global strategist of Euro Pacific Capital Inc.
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