This sentence from the Fed should unnerve you

Is the Fed scared of the wrong thing?

(Image credit: iStockphoto)

Last week, the Federal Open Market Committee (FOMC) — the group that determines monetary policy at the Federal Reserve — released the minutes from its meeting in December. Within the record, Tim Duy, an economics professor at the University of Oregon who runs the blog Fed Watch, caught a stray sentence: "it was noted that the Committee might begin normalization at a time when core inflation was near current levels." This is unnerving.

The Fed is basically saying it might hike short-term interest rates even if the core inflation rate — just regular inflation with the price of food and energy stripped out — stays at its current level of 1.7 percent. That should raise the eyebrow of anyone who's concerned with the health of the American labor force.

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Jeff Spross

Jeff Spross was the economics and business correspondent at TheWeek.com. He was previously a reporter at ThinkProgress.