Bloomberg Surveillance · Saturday, September 12, 2026
Inflation may not return to the Federal Reserve's 2% target without more aggressive measures, according to Ellen Zentner, Chief Economic Strategist at Morgan Stanley Wealth Management. She suggests that current deflationary pressures have subsided, and achieving the 2% target might require more than just tough talk and a couple of rate hikes. Zentner noted that supply-side factors like energy prices contribute significantly to inflation.
“I think what we're starting to see is maybe sort of what we don't want to realize, which is inflation might just sort of be settling around 2.5%, 3%.”
“And if we really want to get inflation back to 2%, it's going to really take more than tough talk and a couple of rate hikes. And are we really willing to.”
“Because what we do is a lot of this inflation pressure is from supply things like energy. So you're going to have to really bring down demand based on where it is now to get your hands around inflation. And it's not clear we really have the appetite for that.”