The Fed just edged a step closer to recognizing a major policy misstep


BusinessInsider/Pedro Nicolaci da Costa/07-15-17

The Federal Reserve is embarking on an annual summer ritual: Downgrading its overly optimistic forecasts for economic growth and, potentially, preparing for a pause in interest rate increases.

Wall Street rallied after Fed Chairwoman Janet Yellen’s testimony to Congress this week as she seemed to open the door for such a pause, by acknowledging that a recent decline in inflation further below the central bank’s 2% target may not, in fact, be as fleeting as policymakers had hoped.

…Fed policymakers “have a pause built into their baseline estimates and it seems the inflation data present a reason to exercise that pause option in September,” according to Julia Coronado, president and founder of MacroPolicy Perspectives.

Share
This entry was posted in Central Banks, Monetary Policy. Bookmark the permalink.

Comments are closed.