While inflation remains tame, inflationary pressures keep building. Thus, the Fed can't let its guard down.
More Quotes from Nariman Behravesh:
It is encouraging that core inflation in 2005 was no higher than the year before even though we had record oil prices. From that perspective, the Fed can feel confident that inflation won't get out of control.Nariman Behravesh
These inflation concerns point to more rather than less tightening by the Fed in coming months.
Nariman Behravesh
I think the way out of these deficits is that the U.S. currency will start to come down over the next two to three years.
Nariman Behravesh
Perhaps the single best piece of economic news in 2005 was that record-high energy prices did not spill over into the rest of the economy. While the Fed can be relaxed about inflationary risks in the U.S. economy, its role is to preempt.
Nariman Behravesh
Both growth and inflation in the coming months could be stronger than financial markets are currently expecting. There is a growing risk that the Fed will have to tighten further and longer than many analysts anticipate.
Nariman Behravesh
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