Wall Street Journal (12/13/15) Josh Zumbrun
U.S. Federal Reserve officials likely will increase interest rates this week. However, even though the labor market is doing well, officials aren’t sure why inflation isn’t behaving as expected. Unemployment has declined to 5%, which is near full employment, but inflation is stuck at less than 1%, below the Fed’s goal of 2%. Although officials forecast inflation will approach 2% next year, they have made the same forecast for the past four years. If officials are again wrong, any rate increase could spark a recession.
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