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Yellen says Fed may have ‘misjudged’ low inflation

CLEVELAND (AP) — Federal Reserve Chair Janet Yellen is acknowledging that the Fed is puzzled by the persistence of unusually low inflation and that it might have to adjust the timing of its interest rate policies accordingly.

Speaking to a conference of economists, Yellen is delving into several questions the Fed confronting as it tries to determine why inflation has remained chronically below its inflation target of 2 percent annually. She says officials still expect the forces keeping inflation low to fade eventually. But she concedes that the Fed may need to adjust its assumptions.

Most analysts expect the central bank to raise rates in December, for a third time this year, in a reflection of the economy’s improvement. But the Fed has said its rate hikes will depend on incoming data.

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