Yellen's Denials About Inflation Will Curb Fed's Independence
NEW YORK (TheStreet) -- Testifying before the Senate Banking Committee this week, Federal Reserve Chairwoman Janet Yellen cherry-picked data on inflation by noting prices are up less than the Fed's target of 2%.
The Labor Department's consumer price index has accelerated since March and was up 4.2% in May.
On Tuesday, it will release June data, and although the numbers may not be quite so high, they likely will show inflation continued above 3%. Once inflation gets out of control, history has shown it is difficult to contain without a steep and painful recession.
Congress recognizes these dangers, and Yellen's cognitive dissonance will add new life to legislative proposals to rein in the Fed's independence.
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