Citing factors such as the rise in commodity prices and the decline of the dollar, a number of observers have warned that the Federal Reserve’s policies risk re-igniting inflation. I would like to address these concerns briefly.
Naturally, I will try to show why these arguments are not of immediate concern, given the three points I made earlier in support of the current accommodative policy. Before I do that, though, I would like to emphasize to those uncomfortable with the Fed’s policy stance that, speaking for myself at least, their views are being heard and taken seriously.