Fed holds interest rates near zero, sees faster growth and higher inflation

[SouthBayDem]

Source: CNBC

The Federal Reserve on Wednesday kept its easy money policy in place despite an economy that it acknowledged is accelerating.

As expected, the U.S. central bank decided to keep short-term interest rates anchored near zero as it buys at least $120 billion of bonds each month. The latter part of policy is a two-pronged effort to support an economy that grew strongly to start 2021 as well as to support market functioning at a time when 30-year mortgages still go for around 3%.

Despite noting the economic strength as well as inflation that is on the rise, if just temporarily, the policymaking Federal Open Market Committee unanimously decided to make no changes in its approach and gave no indications that things will change anytime soon.

Fed Chairman Jerome Powell said the recovery is “uneven and far from complete.” While he noted that inflation pressures could rise in the coming months, these “one-time increases in prices are likely to only have transitory effects on inflation.”

Read more: https://www.cnbc.com/2021/04/28/fed-holds-interest-rates-near-zero-sees-faster-growth-and-higher-inflation.html

[jimfields33]

1. One time increases in prices? I've never seen things go down

Especially the grocery store where most inflation hits.

[OneCrazyDiamond]

3. After W crashed the economy prices went down.

That is the only time I can think of.

[progree]

2. Food at home (grocery prices): slightly lower inflation rate than the overall inflation rate

https://www.in2013dollars.com/Food-at-home/price-inflation

Between 1947 and 2021: Food at home experienced an average inflation rate of 3.13% per year. This rate of change indicates significant inflation. In other words, food at home costing $20 in the year 1947 would cost $195.59 in 2021 for an equivalent purchase. Compared to the overall inflation rate of 3.39% during this same period, inflation for food at home was lower.

Interesting, I didn't know that, but still a heck of a lot of inflation.

One can check out the food at home inflation rate for different periods by using the above link, which also gives the overall inflation rate. For example, enter a starting year of 2000:

Between 2000 and 2021: Food at home experienced an average inflation rate of 1.97% per year. In other words, food at home costing $100 in the year 2000 would cost $150.51 in 2021 for an equivalent purchase. Compared to the overall inflation rate of 2.04% during this same period, inflation for food at home was lower.

There is an overall inflation rate calculator at: https://www.bls.gov/data/inflation_calculator.htm