November 27, 2018

Guided by “potential”: How has that worked?

Here´s Tim Duy writing for Bloomberg: The Economy’s Too Robust for the Fed to Bow to Markets – Growth would need to slow to around 1.8 percent before the central bank considers slowing the pace of interest-rate hikes. But will growth slow enough to ease what the Fed believes are underlying inflationary pressures? In general, central bankers believe the economy currently operates at or beyond full employment… Policy makers are, however, sufficiently concerned about the potential for overheating that they would prefer that unemployment didn’t drift much lower. From the perspective of the Fed, that means growth needs to slow to… Read More

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