BLOOMBERG: …Inflation is also falling below the Fed’s 2 percent goal. Prices rose 1.5 percent from a year earlier in May, as measured by the personal consumption expenditures price index. The inflation gauge is the lowest since January 2011 and has dropped from a 2011 peak of 2.9 percent in September….
“They’re not entirely confident that the options they have are good ones,” said Drew Matus, U.S. economist at UBS AG inStamford, Connecticut. “They’re being more open about their limitations.”…
There’s a growing coalition of members who are inclined to do more and who really feel that they’re failing to meet their objectives,” said Jeffrey Greenberg, a U.S. economist at Nomura Securities International LLC in New York. “They see the unemployment rate and read that as a clear indication that they’re not achieving the full employment aspect of the dual mandate.” … (more)
EDITOR: Because of the multiyear opposition to fiscal stimulus by Republicans in Congress, the Federal Reserve is trying to do Congress’ job via monetary policy. This is an impossible task. Businesses don’t invest because money is cheap. Businesses invest because there is a profitable market for goods and services. Fiscal stimulus as the National Recovery Act, as imperfect as it was, saved us from a depression.
Had we moved ahead with a second and better designed package, we would have millions more back to work and be on the cusp of prosperity by now. But then again, we would be worse off according to right wing Republicans: Barack Obama would be re-elected!
