MNI BRIEF: 'Last Mile' Of Inflation Is No Harder- Atlanta Fed

It would be a mistake for the Federal Reserve to tighten due to concerns the "last mile" of inflation is more arduous according to an Atlanta Fed paper published Tuesday. The research backs up Chair Jerome Powell's remark from his December press conference that there's little certainty around the idea that the last mile is any different.

"It is difficult to conclude that the last mile of disinflation is more arduous," David Rapach, a staff economist at the bank, said in the paper. "This implies that the Fed need not view the final phase of the disinflation process as fundamentally different from the other phases. Specifically, the Fed need not exert some sort of extraordinary effort to consistently bring inflation down the last few percentage points to reach its 2% target. From a risk management perspective, believing that the last mile is more strenuous could cause the Fed to tighten policy more than is necessary." (See: MNI INTERVIEW: Fed Could Hold Longer On 'Entrenched' Inflation)