ATLANTA (Reuters) - Globalization, technology and other forces have changed the way inflation works in the United States in a way that the Federal Reserve is still working to understand, Fed Chair Jerome Powell said on Monday.
“Today’s inflation dynamics are very different from even 25 years ago. Globalization and technology may be playing a role,” Powell said in response to audience questions following a speech, citing the high cost of “brick” cellphones in the 1990s versus the price of a superior smartphone today. “This is not a new problem.” Since setting a 2 percent inflation target in 2012 the Fed has struggled to meet it, and has been surprised at how low inflation has remained despite falling unemployment.
Reporting by Howard Schneider; Editing by Leslie Adler