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2026-09-17 02:10:08
The Federal Reserve removed its previous explanation of supply shocks as the cause of inflation in its July policy statement. The Fed wrote that high inflation "reflects in part supply shocks that have pushed up prices in certain sectors, including energy." If the Fed was convinced that inflation was entirely due to supply shocks, its wait-and-see approach, allowing price increases to subside, would have been reasonable. However, the Fed's September statement removed this wording, stating only that "inflation remains high." This change in wording helps explain one possible reason for today's rate hike: the belief that the root causes of inflation may be broader than previously thought.
