Analyst: Whether inflation can quickly return to target is more important than the current level

Odaily Planet Daily News - Felipe Villarroel of TwentyFour Asset Management stated in a report that the Federal Reserve faces a difficult balancing act. The portfolio manager said: "Although inflation remains above target, and recent developments, especially the rise in oil prices related to Middle East tensions, have added upward pressure, the U.S. economy continues to show resilience." The market is pricing in a 25 basis point rate hike by the Fed on Wednesday. TwentyFour also believes this is the most likely outcome.

Villarroel said: "More important than the current inflation level is whether inflation can return to target quickly enough to prevent inflation expectations from becoming entrenched." He said that recent remarks by Fed Chairman Warsh indicate that he is highly focused on restoring the Fed's anti-inflation credibility, but this meeting will for the first time truly show how this is reflected in policy. (Jinshi)