Joseph Lavorgna, Sumitomo Mitsui's chief U.S. economist, said in a report that
failure of inflation to slow would cost Fed policymakers credibility. Over the
past 70 years core inflation has fallen YoY by 0.9 pct or more only six times;
in each instance the slowdown followed Fed tightening. Lavorgna warned the
longer the Fed waits the more likely rates will have to be raised above the
necessary level, raising the risk of a damaging end to the tightening cycle, and
said Chair Walsh understands this.
