Why the Fed Is So Reluctant to Head Off Inflation Threat

While Federal Reserve officials have considered raising interest rates to break the back of rising commodity prices—and could one day use that tool—so far they have concluded it's the wrong medicine for the problem.

Top Fed officials see the rise in commodity prices as coming mostly from emerging market growth. If anyone has monetary policy wrong, if any economies are overheating, it's likely those countries, not the U.S., they believe.

Some officials also contend that the only way the Fed's easy-money policy could be causing inflation is if investors are stockpiling assets, which they see little evidence of.

Read Full Article from CNBC.com

- Posted: 2011-04-15 19:45:17

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