Inflation Remains Primary Concern for Federal Reserve Policy

On August 20, Karen Manor, fixed income strategist and portfolio manager at Hermes Investment Management, stated in a report that U.S. inflation remains a dominant concern for policymakers. Federal Reserve officials have shown significant consistency on this message. Policymakers have also repeatedly indicated that the current U.S. labor market is no longer viewed as a major source of inflationary pressure. Instead, employment conditions are increasingly seen as closer to balance. As a result, the policy framework has shifted from concerns about the labor market to inflation as the primary variable.