Inflation

Members of the economic research department of the Federal Reserve Bank of San Francisco take a look at the relationship between the effective lower bound interest rates and inflation.

An infrastructure plan is a likelihood, in some form, since members of both parties favor it.

With interest rates on hold until the picture is clearer, the Summary of Economic Projections should take center stage.

Inflation, low before the coronavirus shut the economy, drops further.

Gross domestic product grew at the expected 2.1% annualized pace in the third quarter, as economists wondered how long consumers will stay strong and offset soft business investment.

The economy should continue its moderate growth path, inflation may tick up, downside risks seem to have been put at bay by the Federal Reserve, and rates are likely to stay where they are, experts say.

Inflation remains tame, and although the consumer price index has ticked up, producer prices surprised to the downside Thursday.

While the consumer price index climbed 0.3% in July, as did the core rate, the broad-based increases are unlikely to continue, according to analysts.

The market will look for clues about monetary policy when Fed Chair Jerome Powell testifies before Congressional panels this week.

Consumers see inflation rising 2.7% in the next three years and expect the Fed to cut rates, according to the Federal Reserve Bank of New York’s June Survey of Consumer Expectations.