Fed Faces Credibility Question as Inflation Returns

The video discusses the Federal Reserve's inflation target, balance sheet reduction, and the impact of hurricanes on economic data. It highlights the Fed's inflation credibility issues and the interest rate path, comparing it with other central banks like the ECB and BOJ. The video also examines the Personal Consumption Expenditures (PCE) index and its divergence from targets despite a tightening labor market, questioning the link between inflation and unemployment.

In what ways has the labor market affected the Fed's inflation targets?

What questions are Fed officials asking themselves about the relationship between inflation and unemployment?