Economist: Inflation is no longer a major risk, the Federal Reserve should focus on economic growth

Neil Dutta, chief economist at Renaissance Macro, writes that while inflation is still above the Fed's 2 per cent target, the cooling trend in prices is so clear that the Fed should shift its focus entirely to propping up a weakening economy. Energy prices are falling, he says, which will drive down petrol costs and help damp inflation expectations. In addition, slack in the labour market has risen and rental housing inflation is slowing. "In short, inflation is no longer an issue. Policymakers should make it clear that maintaining economic growth should be a priority now."