January's personal consumption expenditures (PCE) price index came in hotter than expected today, rising 5.4% from a year earlier vs. a 5% increase in December.
Some Republican lawmakers insist that the limit will be raised and the U.S. government will not default on its debt. Others seem to be considering alternatives that Powell considers to not be viable.
A letter from the comptroller to major state-employee pensions provides a list of "energy boycotters," claiming firms including BlackRock, UBS, and Credit Suisse "should not ... benefit from assets invested for the future of Texans while simultaneously undermining our state's economic future."
According to the Fed minutes, "maintaining a restrictive policy stance until inflation is clearly on a path toward 2 percent is appropriate from a risk-management perspective."
The proposal would create a two-tier system—one for those who directly invest with a mutual fund, and another for those that invest through intermediaries, such as the typical retirement plan participant, say opponents.
"The increase in January's PPI—which rose far more than the estimates, erasing last month's decline—moderates expectations for disinflation over the year ahead."
If the Fed had to set its inflation target today, it would choose 3% or 4%, rather than 2%, but "it is very difficult to change a target when you have missed it for so long. ... The minute you do that, your credibility is hit even harder."
