With recent data showing that both inflation and inflation expectations have eased, it would be irresponsible for the US Federal Reserve to create much higher unemployment. Amid so much uncertainty, it should instead pause interest-rate hikes until a more reliable assessment of macroeconomic conditions is possible.
NEW YORK – The US Federal Reserve Board will meet again on September 20-21, and while most analysts anticipate another big interest-rate hike, there is a strong argument for the Fed to take a break from its aggressive monetary-policy tightening. While its rate hikes so far have slowed the economy – most obviously the housing sector – their impact on inflation is far less certain.
NEW YORK – The US Federal Reserve Board will meet again on September 20-21, and while most analysts anticipate another big interest-rate hike, there is a strong argument for the Fed to take a break from its aggressive monetary-policy tightening. While its rate hikes so far have slowed the economy – most obviously the housing sector – their impact on inflation is far less certain.