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The End Is Not near
Summary: Fed Chairman Bernanke tipped off the market that the Fed is highly likely to pause in its series of rate hikes at the June meeting, a statement that has already been subject to widely different interpretations. We think the Fed's purpose in pausing is simply to give it more time to evaluate the economy's performance to better judge just how much interest rates need to rise. Thus, given our judgment of the growth outlook, we expect the Fed to resume rate hikes by fall.
Fed Chairman Bernanke tipped off the market that the Fed is highly likely to pause in its series of rate hikes at the June meeting, a statement that has already been subject to widely different interpretations. We think the Fed's purpose in pausing is simply to give it more time to evaluate the economy's performance to better judge just how much interest rates need to rise. Thus, given our judgment of the growth outlook, we expect the Fed to resume rate hikes by fall.
A very obvious point I've made in the past is that the Fed is not trying to cause harm. This very innocuous statement is helpful, if only because there are many "analysts" or commentators who make the case that the Fed always overshoots and that it has already done so. In fact, it is not easy to determine precisely how much to raise interest...
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This section contains 447 words (approx. 2 pages at 300 words per page) |
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