Fed Schmid: Don't let your guard down for one month of optimism

On 5 August, the Fed, Schmidt, stated: “In looking at the economy, my focus falls entirely on inflation, which is still too high. The Fed defines price stability as an inflation rate of 2 per cent. Why 2%? Because this level seems to be right, it does not have a real impact on the day-to-day decision-making of households and businesses. However, while the latest inflation data for June showed encouraging signs of slowdown, over-reliance on a single data point was premature compared to recent trends. Volatile oil prices played an important role both in pushing inflation up in the previous months and in the fall in June. As oil prices rise again, the sustainability of any mitigation in energy remains uncertain.” Kim Xian