The Fed’s preferred inflation indicator has shown little sign of a rebound despite falling unemployment and a pickup in growth.
Yellen is now concerned that there are longer-term trends at work, and suggested that those concerns are shared by others at the Fed. “My colleagues and I are not certain that it is transitory,” Yellen said in a speech Tuesday at New York University’s Stern School of Business.
That raises the question of what Powell now believes. A Fed governor for the past five years, Powell has expressed some concerns about low inflation but hasn’t yet gone as far as Yellen. In an Aug. 25 CNBC interview, Powell called low inflation “kind of a mystery.”