US core inflation rates are well below the 2% target even with recent increases. The PCE index of inflation, the Fed's choice, is below the 2% target. Headline inflation is also below the 2% target. Inflationary expectations are moving higher but still not in any danger zone. 10-year break even inflationary expectations are at 2.29 from a low of 1.5% at the end of August. Hence, the policy approach is going to be status quo.
The latest Fed comments are that core inflation expectations and reality will stay low. Do not worry, there will be no inflation. Yet, the result of the world is starting to think differently.
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