Inflation has been sticky for quite some time, and does not appear like it will abate any time soon. The normal obvious course for the Fed is to raise the interest rate it controls, which has the effect of tamping down demand by making the cost of money/borrowing more expensive. Unfortunately, it is becoming increasingly clear that this is not a "normal obvious" inflation. It's not driven by an exuberance of demand and buying of stuff or services or undue wage growth. Rather, it's a cockeyed supply disruption side inflation fueled by political and geopolitical forces, including mini-trade wars and erratic tariffs, a war in the Mid-East that sees no evident solution, that raising rates will do nothing to address. So, here's the bind: If the Fed doesn't raise rates, it looks like it is not addressing inflation, and if it does raise rates, it will inflict economic and other possible harm without tamping down inflation. It just might be the case that this inflation is with us and the Fed is on the sidelines until a certain president is out and his economic team is replaced with professionals who know what they're doing and have the freedom to do it.
[EOP]
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