Fed took comfort in inflation expectations staying anchored, says Fmr. Kansas City Fed President

• Markets are grappling with understanding the Fed's stance on persistent inflation and its policy tools.
• The federal deficit is unsustainable, and the lack of a clear plan to address it contributes to upward pressure on long-term Treasury yields.
• The cost of not acting swiftly on inflation includes eroding consumer purchasing power and risking the public's confidence in the Fed's ability to achieve price stability.

Former Kansas City Fed President Esther George discusses the market's attempt to sort out the Fed's communication regarding persistent inflation, the impact of geopolitical events on oil prices, and the unsustainability of federal deficits. She emphasizes the importance of clear Fed communication to maintain public confidence and address the costs of prolonged inflation.