The Atlanta Fed’s Business Inflation Expectations for the year ahead declined to 1.4% in April after 1.9% in March. The reading was the lowest in the survey’s relatively short history since October 2011. The decline reflects deterioration in what would be considered normal business activity. Taken in conjunction with the drop in the University of Michigan Survey of Consumers 1-year inflation expectations, the FOMC is going to find the near-term inflation outlook decidedly to the downside in spite of a reasonable expectation of inflation returning to target over the medium term as evidenced by the Survey of Consumers 5-year inflation index which was up in April.
Fed policymakers are going to be less concerned about too low inflation than protecting the labor market when they next meet on April 28-29.
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