The December 2024 economic projections from the central bank show significant changes from the September figures. They indicate rising inflation and potential impact.

Inflation just hit a five-month high in November and asset prices are smashing records. The Federal Reserve has been communicating its ambition to stamp out inflation for over two years and yet it’s about to cut interest rates as prices continue to move in the wrong direction.

More importantly, inflation is also proving stubborn. Some argue that the Fed should be willing to tolerate (even if only implicitly, rather than explicitly) inflation being a bit higher for a bit longer than it theoretically should. Mohamed A. El-Erian over on Bloomberg Opinion explains this “3% inflation target” view here.