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Expand chart
Data: St. Louis Fed; Chart: Axios Visuals

Members of the Fed, including chair Jerome Powell, have spent nearly a month talking about the central bank's shift to average inflation targeting in an effort to boost U.S. inflation and it has fallen on deaf ears.

Driving the news: A survey from the Cleveland Fed found that "despite extensive coverage in the news media, Powell’s speech apparently did not reach or register with the vast majority of the population."

  • Even for those who were aware, "the news had little impact."

Why it matters: Inflation expectations are a core tenet of inflation and the Fed has failed to move the needle on the public's outlook.

  • "[B]oth before and after the announcement, respondents’ two most commonly perceived objectives of the Federal Reserve were maintaining a strong dollar and keeping interest rates low to reduce the government’s cost of borrowing," the Cleveland Fed notes.
  • Perhaps more importantly, "investors are not convinced the Fed will succeed," Steven Ricchiuto, U.S. chief economist at Mizuho Securities USA, says in a note to clients.

Be smart: "Investors are assuming that the risk of deflation is rising as the Fed’s ability to ensure a sustained recovery on its own is limited," Ricchiuto says.

  • "They highlight the fact that the Fed’s ability to further influence forward rates is exceptionally limited."

Go deeper

Dion Rabouin, author of Markets
Dec 18, 2020 - Economy & Business

Bank of Japan to assess current programs as core inflation hits 10-year low

Data: Investing.com; Chart: Axios Visuals

The Bank of Japan extended its special support programs for businesses by six months and said it would “conduct an assessment for further effective and sustainable monetary easing” after Japan’s core consumer prices fell at the fastest pace in 10 years in November.

Driving the news: November's core consumer price index decline beat out October's historic decline when consumer prices fell by what was then the fastest pace in 10 years.

Updated Dec 19, 2020 - Politics & Policy

Trump signs two-day funding bill to avoid government shutdown

Photo: Andrew Caballero-Reynolds/AFP via Getty Images

President Trump late Friday night signed the continuing resolution that will fund the federal government through Dec. 21 and temporarily avert a partial shutdown.

Why it matters: The 48-hour stopgap will also give lawmakers the weekend to resolve outstanding issues with a $900 billion coronavirus relief package and $1.4 trillion long-term spending deal.

Bryan Walsh, author of Future
52 mins ago - Technology

The smart city comes of age

Illustration: Aïda Amer/Axios

Better sensors, more intelligent AI, and the coming wave of 5G wireless could finally fulfill the promise of the smart city.

Why it matters: How we organize, run and power our cities will be increasingly important in the years ahead, as urbanization expands and the damaging effects of climate change compound.