The Fed’s other inflation-fighting medicine might be harder to swallow
The Fed’s official interest rate gets all the attention, but the shrinking of its balance sheet will also drive up borrowing costs for households and business.
Washington| After three years of easy money and, more recently, breakaway inflation, the US Federal Reserve has known for a while that Americans needed to take some medicine.
On Wednesday (Thursday AEDT), fearing a violent reaction from financial markets, the world’s most powerful central bank administered just a minimum dose.
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Matthew Cranston is the United States correspondent, based in Washington. He was previously the Economics correspondent and Property editor. Connect with Matthew on Twitter. Email Matthew at mcranston@afr.com
