Despite U.S. fiscal problems, the Fed appears to still retain excellent inflation credibility with financial markets… Although confidence in the Fed might explain the quiescence of inflation expectations, the structure of U.S. government debt may be more important… [I]nflating away the U.S....

Fluctuations in the price of motor fuel (mainly gasoline) have caused most of the monthly noise and year-over-year fluctuations of headline CPI inflation over the past four years.

The experience of the past decade illustrates the sensitivity of inflation in emerging markets to rapidly rising food prices.

Neither core nor headline inflation measures can consistently and reliably predict medium-term inflation well enough to be of much use to policymakers.>

If oil prices continue to rise and the RMB continues to appreciate, the U.S. inflation rate may increase at a faster pace in the near future. And this would have an unwelcome impact on consumers’ wallets.

Oil price shocks appear to have only transitory effects on headline inflation and virtually no impact on measures of underlying trend inflation.

In order to maintain its credibility, however, the FOMC will have to take actions consistent with achieving its stated inflation objective.

Must the FOMC increase its target before inflation, or will inflation increase and cause the FOMC to increase its target?

Large-scale asset purchases may have limited power to raise TIPS-implied inflation expectations—something that might appeal to policymakers fighting deflation.