KBTX Interviews Dennis Jansen on Inflation, Federal Reserve

Summary: Dennis Jansen spoke to KBTX News on Monday, April 18, 2022 on rising inflation and the Federal Reserve System’s role in lowering it.

The U.S. inflation rate continues to climb and is not expected to quickly return to its previous level. Jansen explained, “Even if we are at the peak, it’s not going to go away quickly. I think the inflation rate will be significantly above the Federal Reserve Board’s two percent target, probably for the rest of the year.”

Jansen also shared the Federal Reserve System’s role, inflationary goal, and potential actions. “The Federal Reserve System is in charge of a number of things, especially price stability and financial market stability. And the Federal Reserve System has announced, and has for many years now, a two percent inflation target. Their preferred measure of inflation is called the Personal Consumption Expenditure deflator… and it is well above the two percent target that the Federal Reserve System has announced. In terms of what it could do about it, it is slowly raising the interest rate on reserves, but it’s doing so at rather a glacial pace – it raised the interest rate on reserves a quarter of a percent in March – and it’s talking about raising it another half a percent at the next meeting in early May.”

As for what the Fed hopes to achieve in the near future, Jansen said “I think what the Fed is hoping for is a ‘soft landing’ – that they could gradually bring down the inflation rate and yet not have the unemployment rate rise too much. I think the actions they take will likely cause some rise in the unemployment rate and the question is [by] how much?’

See the full interview on KBTX News.