Federal Reserve raises inflation expectations, mulls 2023 liftoff

The US Federal Reserve’s latest economic projections have its preferred measure of inflation rising to 3.4 percent this year, a full percentage point higher than its March forecast.

The United States Federal Reserve reiterated Wednesday that it is willing to tolerate a higher level of inflation as it works towards its goal of getting as many Americans back to work as possible, but upped its comfort level when it comes to how high it is willing to see that rate go. In remarks following the conclusion of the Fed’s latest two-day policy meeting, Chairman Jerome Powell urged patience and humility as the US economy continues to recover from last year’s COVID-19 lockdowns. “This is an extraordinarily unusual time and we really don’t have a template or any experience of a situation like this, and so I think we have to be humble about our ability to understand the data,” Powell said. “It’s not a time to try to reach hard conclusions about the labour market, about inflation, about the path of policy. We need to see more data and we need to be a little bit patient.”